With Bitcoin’s explosion in value over the past few years and the resulting interest from more and more amateur investors, enthusiasts, and institutional investors, the general public has become very interested in the actual mechanics of the cryptocurrency and other similar cryptocurrencies. Many understand that Bitcoin acts as a store of value, sure, but not how it can protect that value.
What is Proof of Work? (Explanation about cryptocurrency)
When it comes to a traditional currency like the US dollar, the money is no longer in your possession once it leaves your hands. It is also incredibly difficult to counterfeit. Commodities like gold or oil are rare, in finite supply, and difficult to mine and extract.
But if Bitcoin is just a series of codes, what’s to stop someone from duplicating them? Or spending them multiple times?
Well, that’s where something called Proof of Work comes in. It’s what gives Bitcoin the fundamental characteristics of a real currency, and it’s also part of the reason Bitcoin uses more energy than the entire country of Argentina.
