Cryptocurrency depends on mining to exist. Computers known as miners solve formulas that become increasingly more difficult. Completed formulas produced rewards in the form of cryptocurrency. Bitcoin and similar cryptocurrencies were purposely designed to become more difficult to mine over time. The diminishing supply keeps cryptocurrencies valuable.

Increasing difficulty requires more powerful computer components, so mining in 2017 costs more than it did five years ago, especially for popular currencies like Bitcoin. The higher mining startup costs are just one reason why fewer people are just now starting to get into mining: there are fewer coins available now than there once were. Fortunately, you can buy cryptocurrencies from exchanges and even individual sellers.

If you’ve been paying attention to cryptocurrency news, you may have noticed recently that the Bitcoin price was around $19,000 each. That’s a far cry from the $.06 per coin in the beginning! Someone who invested in Bitcoin in its infancy may have accrued hundreds to millions of dollars in profit.

A closer look at the value of cryptocurrencies over time shows less of a straight climb to the very top. The price would jump to $30 before dropping to $2.05 each. It wasn’t until 2013 that Bitcoin would surge to over $100. Despite briefly doubling, the value dropped back to around $100 before the price surged to $1,000 each at the end of the year.

Throughout 2014 and early 2015, Bitcoin experienced a steady decline, reaching a low of $177. The cryptocurrency didn’t regain its value until the end of 2015, and it took until 2017 for the price to surge back over $1,000 per Bitcoin. The end of the year was frenzied for the cryptocurrency, which reached a price of $5,000 per coin for the first time in October. Bitcoins would be worth nearly $20,000 each just two months later. Prices have since dipped to around $15,000 per coin, but that’s to be expected with any cryptocurrency.

Although we’re focused on Bitcoin because it’s better-known and arguably more successful than other types of cryptocurrencies, it’s certainly not the only one. Litecoin has been around almost as long as Bitcoin and was designed with the intent to be quicker and easier to use. Although Litecoin and Bitcoin peak at similar times, Litecoin has a lower value, and individual growth varies.

Ethereum is a newer kid on the block, originating in 2015. Ethereum is also a programming language and runs on a specific platform, which supports peer-to-peer contracts and apps.

These are just a few of over 1,000 cryptocurrencies available to trade. You can choose which to invest in.

Cryptocurrency has no physical format. Think of them a bit more like stocks. Your proof isn’t a certificate but a digital wallet that enables you to use Bitcoin for purchases (everyone from Reddit to Subway to Microsoft accepts Bitcoins) or to trade them with others. You can access your wallet with an app (Coinbase is a popular app that is compatible with several cryptocurrencies, including Bitcoin, Litecoin, and Ethereum), and you must sign transactions with a private key that is saved in your wallet.

On your phone, a QR code facilitates the exchange of cryptocurrencies. This generates an address (and you should use a new address for every transaction) Every transaction is recorded in a blockchain, a shared public ledger, which is how wallets determine how much Bitcoin you own.

You must keep your wallet secure to protect that private key. You can also consider keeping two wallets: one that contains a small amount of cryptocurrency for trading and another offline wallet that contains the bulk of your cryptocurrency.

While you can spend your cryptocurrency, there are some key differences from regular card transactions. First, exchanges with currencies such as Bitcoin cannot be reversed. Secondly, consumers using cryptocurrencies lack the sort of protections that banks and credit card companies offer their customers.

Finally, it’s up to you to pay the appropriate taxes on your cryptocurrency because these currencies are not officially recognized by governments. Think of it similar to making a purchase online or in another state where sales tax does not apply. You are still expected to report those purchases on your taxes; although, not everyone does.