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# How do Cryptocurrencies Work?

Cryptocurrencies are a form of money that lives online in distributed, decentralized databases. 

* **Database:**  Nearly all money today (92%) exists only online and is stored in databases – cryptocurrencies are no exception
* **Distributed:**  Identical copies of these databases are shared over thousands of computers located all over the world
* **Decentralized:**  Cryptocurrencies rely on a combination of blockchains, digital key cryptography and consensus mining to ensure decentralization

I know this might all seem a bit confusing, so let’s dive into each of these a bit deeper in the next sections.