Cryptocurrency: online currency based on a peer-to-peer network (as opposed to any central entity, like a bank for traditional currency). The system is decentralized, so no single entity controls exchanges. To prevent corrupted transactions, the currency exchanges use blockchain technology. This means that multiple machines host data (as opposed to one central server). As a result, data are completely public, similar to a Google Doc.

How does cryptocurrency work? First, a computer has to mine it, which is the process of solving a complex mathematical problem for a reward. Mining requires a powerful computer and a specialized program, so sometimes miners will pool resources to make it worthwhile. Completing computations creates new units of cryptocurrency (a bitcoin, for example). Once the user has a bitcoin or several, he can exchange them like traditional currency. Because the systems have solid encryption, it is almost impossible to steal someone’s cryptocurrency by false transactions. However, someone could find and break into a digital wallet and spend its contents, and since this is a largely unregulated market, owners cannot recover losses.

Why do you care? Some companies accept cryptocurrency. You can also buy stock, and bitcoin and other cryptocurrencies have become a somewhat popular investment lately. However, if you’re not up for playing the market and you’d rather buy your sandwiches with traditional currency, this doesn’t much affect you. If want to invest in cryptocurrency, bear in mind that mining requires a lot of computing power. Because the computer is running constantly, it can increase your electric bill. However, for some, mining pays off. For others, investing in the stock market makes a tidy profit (though not always). Bottom line: If you are interested in cryptocurrency investment, do thorough research first.