What is Cryptocurrency? 21st-century unicorn or the money of the future?
Virtual currencies, perhaps most notably Bitcoin, have captured the imagination of some, struck fear among others, and confused the heck out of the rest of us.
What is Cryptocurrency?
Cryptocurrency is electricity converted into lines of code with monetary value. It is a form of digital or virtual currency that is designed to be secure and anonymous in many cases. It uses Cryptography, the process of converting legible information into an almost uncrackable code, to track purchases and transfers and is associated with the internet.
A cryptocurrency is difficult to counterfeit because of this security feature. It is a medium of exchange like normal currencies but designed for the purpose of exchanging digital information through a process made possible by certain principles of cryptography. It is fully decentralized, so the government has no control over it.
It is maintained by a community of cryptocurrency miners who are members of the general public, the massive network of people who contribute their personal computers to the network.
First cryptocurrency, Bitcoin
The first cryptocurrency and still most important cryptocurrency to capture the public imagination was Bitcoin, which was launched in 2009 by an individual under the pseudonym Satoshi Nakamoto. By September 2015, there were over 14.6 million bitcoins in circulation with a total market value of $3.4 billion. Satoshi said he developed “A Peer-to-Peer Electronic Cash System” with a goal to invent something; many people failed to create before digital cash.
It’s completely decentralized with no server or central authority and has become a standard for cryptocurrencies. The supply of Bitcoins is limited to twenty-one million Bitcoins that can never be exchanged unlike the government issued money. Obtaining a bitcoin is like obtaining any other currency. A single bitcoin varies in value daily. The currency itself is self-contained and un-collateral, meaning that there is no precious metal behind the bitcoins; the value of each bitcoin resides within each bitcoin itself.
Why do we use Cryptocurrency?
The answer to this question is simple. We should use it as it’s a way towards the right direction for the global trade where everyone can be involved. You can use this money for your comfort, moreover, it is anonymous and you can send it directly and fast between wallets. It will give you full control over your money and you can use it anywhere, in any country. Many countries have official exchanges set up for Bitcoin and countries such as Japan have fully adopted Bitcoin as an official currency for commerce. Ripple has been adopted by many banks in India and Asia as an alternative system to do banking transactions and Ethereum has started a platform which truly revolutionized blockchain.
Types of cryptocurrency
Bitcoin prices are soaring new highs, so here’s a list of other top 5 cryptocurrencies that could be worth your while.
Ethereum has the second largest market capitalization of all the cryptocurrencies. It is designed on the technology of blockchains. It is not only developed as a currency for exchange but is also a platform and programming language that can be used to build and run applications on. It can be used to codify, decentralize, secure and trade just about anything.
Launched in 2011, Litecoin was among the initial cryptocurrencies following bitcoin. It enables instant, near-zero cost payments to anyone in the world. It is an open source, the global payment network that is fully decentralized without any central authorities. The Litecoin blockchain is capable of handling higher transaction volume and provides protection from wallet-stealing viruses and trojans as well as a sanity check before sending payments.
If Bitcoin is like http for money, Zcash is https, that’s how one can define about Zcash. It is secure and offers privacy and selective transparency of transactions. It is the first open, permissionless cryptocurrency that can fully protect the privacy of transactions with zero knowledge of cryptography. Zcash brings fungibility to cryptocurrency, shielded transactions hide the sender, recipient, and value on the blockchain.
It is a distributed, open-source payments system that’s still in beta. Ripple enables banks to settle cross-border payments in real time with end-to-end transparency at lower costs. According to its source, its main goal is to enable people to break free of the “walled gardens” of financial networks.
It is a secretive version of Bitcoin. It offers more anonymity as it works on a decentralized master code network that makes transactions almost untraceable. It can be mined using a CPU or GPU. Dash is focused on becoming the first digital currency capable of mass-market adoption.