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But how does bitcoin actually work?How Does Cryptocurrency Work? A cryptocurrency is a digital, encrypted, and decentralized medium of exchange. Unlike the U.S. Dollar or the. A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant. Cryptocurrency is digital money that doesn't require a bank or financial institution to verify transactions and can be used for purchases or as an investment.