Cryptocurrency is a means of exchange like the US dollar. However, unlike so-called fiat currencies, crypto remains completely digital, decentralized and tracked exclusively by a distributed ledger known as a blockchain.
Blockchains provide authenticity of a cryptocurrency transaction by verifying one of two methods: proof-of-work (PoW) or proof-of-stake (PoS). Without these vital cryptography-based verification methods, cryptocurrency could not survive as an exchange method.
The world-famous (sometimes infamous) Bitcoin is backed by the PoW verification method. PoW relies on raw computing power to solve cryptographic problems called hashes. This process, known as mining, is a kind of competition between Bitcoin miners—a race to solve each new hash and add a verified block to the blockchain.
When a miner wins the race, they are rewarded with a few coins (the current value of one bitcoin is more than $64,000). This method incentivizes miners to continue mining and introduces new coins into the economy.
The PoS method uses less energy and is, therefore, better for the environment. Those who want to participate in the validation process for a PoS-based cryptocurrency like Ethereum must be willing to “stake” the currency by locking a minimum amount of their holdings in a communal safe. The more coins a validator stakes, the more transactions they can validate.
Validators are chosen at random to validate new blocks, and each block must be validated by more than one validator. When a specific number of validators verify that a block is accurate, that block is finalized and officially added to the blockchain.
Blockchain technology can and does keep track of more than just cryptocurrency. Other notable items include non-fungible tokens (NFTs), decentralized banking and video games.

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