Bitcoin: How Cryptocurrencies Work

A cryptocurrency (or “crypto”) is a digital currency that can be used to buy goods and services. Online transactions are fast and secure thanks to an online ledger. The majority of the interest in these unregulated currencies is to trade for profit, with speculators skyrocketing prices with online traction.

Imagine a coin that is currently worth thousands of US dollars but it’s not made of gold, silver, or any precious metal. It’s not even the kind of coin you can put in your piggy bank. It’s a digital currency; which means it only exists electronically. This is what Bitcoin is. Unlike most currencies, Bitcoin is not attached to any particular state or government, so it doesn’t have a central issuing authority or regulatory institution. In other words, no organization or individual decides when to make more bitcoins, keeping track of where they are located, among other features seen in other currencies. How can this have any value at all? Bitcoin wouldn’t work if there wasn’t a network of people or an important factor called