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'''Cryptocurrency''' is an alternate form of [[currency]] which, like most modern money, has no actual value. It is not backed by gold or any other physical thing—instead, it is backed by the investment of others. [[Fiat currency|Unbacked money]] is only worth the value people put into it, and cryptocurrency was designed with this in mind. Most kinds are based on the [[proof-of-work]] model, which means that the value of the currency is based on the work others put into it. This work is done in the form of mining, which is the act of generating new blocks of crypocurrency. Only a few are based on the [[proof-of-stake]] model, in which it is earned by investing the currency itself.
'''Cryptocurrency''' is an alternate form of [[currency]] which, like most modern money, has no actual value. It is not backed by gold or any other physical thing—instead, it is backed by the investment of others. [[Fiat currency|Unbacked money]] is only worth the value people put into it, and cryptocurrency was designed with this in mind. Most kinds are based on the [[proof-of-work]] model, which means that the value of the currency is based on the work others put into it. This work is done in the form of mining, which is the act of generating new blocks of crypocurrency. Only a few are based on the proof-of-stake model, in which it is earned by investing the currency itself.
==History==
==History==
==How it works==
==How it works==
===[[proof-of-work|Proof-of-Work]]===
===Proof-of-Work===
In this system, an individual runs a "miner" program which works through complex calculations to eventually generate a large block of seeming gibberish—this block is an alt-coin. This block is saved to the user's "wallet," that is, a place of storage for this cryptocurrency. When the user is ready to spend this currency, it is sent to another user's wallet (using a [[wallet address]]) through a [[peer-to-peer]] system.<ref>https://www.cryptocoinsnews.com/bitcoins-future-proof-of-stake-vs-proof-of-work</ref><ref name="bitcoinmagazine.com">https://bitcoinmagazine.com/articles/what-proof-of-stake-is-and-why-it-matters-1377531463</ref><br />
In this system, an individual runs a "miner" program which works through complex calculations to eventually generate a large block of seeming gibberish—this block is an alt-coin. This block is saved to the user's "wallet," that is, a place of storage for this cryptocurrency. When the user is ready to spend this currency, it is sent to another user's wallet (using a [[wallet address]]) through a [[peer-to-peer]] system.<ref>https://www.cryptocoinsnews.com/bitcoins-future-proof-of-stake-vs-proof-of-work</ref><ref name="bitcoinmagazine.com">https://bitcoinmagazine.com/articles/what-proof-of-stake-is-and-why-it-matters-1377531463</ref><br />