The cryptocurrencies are virtual coins. They can be exchanged and operated like any other traditional currency, but they are beyond the control of governments and financial institutions.
There is a large number of cryptocurrency available, all with their own characteristics and applications. Those that have greater market capitalization are – at least for now – a minority, which includes bitcoin, bitcoin cash, ether, litecoin, ripple and dash.
What is mining cryptocurrencies?
Minar cryptocurrencies is the process through which cryptocurrency transactions are verified and new units are offered.
The objective of the miners is to collect the latest transactions in blocks (that is, verified sets of transactions) and find a solution to a complex algorithm. Doing this you get a reward: a fixed amount of cryptocurrency. This amount varies according to the cryptocurrency in which you work; The bitcoin reward, for example, is currently 12.5 bitcoins.
The solution to this algorithm is a continuous process and depends on the results of previous algorithms to perform the following calculation. In the same way, the difficulty of the algorithm can be (and is) adjusted frequently, in order to make the work of the miners constant – and even if the processing capacity is improving. This is similar to the rate at which raw materials such as gold enter the market (hence the term ‘mine’).