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But wait…what’s Cryptocurrency?
Digital currency is a medium of exchange typically operated through the internet, not tied to a physical currency, allowing immediate, borderless transfers.
Cryptocurrencies(crypto) are a specific type of it, in which cryptography guarantees the security of transactions and controls the creation of new money.
After the success of Bitcoin (created in 2009), over 6,000 different cryptos were created; most of them are based on blockchain and mined through complex calculations.
They have very different values, with Bitcoin being as high as 9.517,24 USD per unity and Ethereum equaling 235,07 USD as of 01/06/2020 17:30 Greenwich Time.
Their difference, however, lays not in their value, but in the type of money-producing Blockchain users agree on, called protocol.
Most crypto use proof of work as their protocol. It means new money is produced only after providing evidence that the user completed a given task.
Because of the cumulative nature of Blockchain, every time such a task is solved (producing new money), thecomputational capacity needed to do so increases.
To get an idea on the scale of this increase, if we set the degree of difficulty of Bitcoin mining on its first day in 2009 as 1, today it would be around 13 trillion.