Cryptocurrencies – How they work

Cryptocurrencies are the latest rage, with governments all over the world paying attention to them. The value of cryptocurrencies is now > $20B USD with millions of dollars being transacted each day. There were at least 80 cryptocurrencies on the market at the time of publishing. The most famous is Bitcoin, however, most of these are worth fractions of cents.

Cryptocurrency is created when users use their computers solve (“mine”) puzzle-like algorithms. The puzzles become more difficult to solve as more people attempt to “mine” the currency.

Cryptocurrencies can now be used to vacation in a Jamaican villa, shop on overstock.com, pay for Sacramento Kings tickets (NBA), or on Zynga games.