Let’s talk about cryptocurrencies, and in particular the most famous: Bitcoin. For most people, it is something mysterious; for some, it is no less than the fulfillment of one of the most cherished dreams ever since the beginning of society and the economy as we know it: to coin money on their own, bypassing the monopoly of the state, and dispensing with banks and other intermediaries for their transactions. A real “democratic” currency, exchanged through a peer-to-peer network made up of many connected computers (called nodes) — a currency conceived, in theory, to be circulated, not hoarded.
Easier said than understood. Indeed, the production of cryptocurrency, which evokes metaphorically the extraction of minerals (“mining”), is certainly not an activity within the grasp of ordinary people.
To summarize (very) briefly: On a regular cycle, an algorithm produces a series of encrypted records, which are transformed into money only after they have been decrypted. Needless to say, such an operation requires great computing power, and thus large-scale hardware that is able to accomplish it. It is easier to just buy Bitcoin, exchanging it with money in one’s own currency. There are special platforms for this; you only need to open a virtual “wallet” in which you can store the cryptocurrency. From the wallet, of course, you can also initiate payments. You can use Bitcoin to shop online, as well as at physical stores that accept it as a form of payment. But you can also use it — this is the main focus nowadays — for financial speculation.