Cryptocurrency is a type of digital money designed for security, and anonymity. Cryptocurrency is linked to cryptography, which is used with the internet. This is a process involving the conversion of legible information into a code that is nearly impossible to crack. The code is used for tracking transfers, and purchases. Cryptography was created during the Second World War due to the need to provide secure communications. This eventually evolved due to the digital era, with new technologies in computer science, and mathematics. Cryptography is currently used to secure money, information, and communications online.
Bitcoin was the first cryptocurrency, and was created in 2009. Bitcoin remains the most well-known cryptocurrency. The last decade has seen cryptocurrency proliferate, and the internet now has 900 cryptocurrencies available. The users of cryptocurrency can store money, and make secure payments without being required to use their name like when going through a bank. This is done with the use of decentralized technology. Blockchain is a distributed public ledger used to run cryptocurrency, is held by the holders of the currency, and contains an updated record of all transactions. The cryptocurrency uses a process referred to as mining in its creation. The power of computers is harnessed to solve the difficult mathematic problems necessary to generate the coins. Cryptocurrency can also be purchased from brokers, stored, and spend with the use of cryptographic wallets.
Bitcoin was the very first type of cryptocurrency, and remains the most commonly traded of all cryptocurrencies. Satoshi Nakamoto developed the currency in 2009. He additionally developed blockchain, and is considered a mysterious figure. As of July 2017, the market capitalization of Bitcoin was approximately $45 billion.
Ethereum was established as a cryptocurrency in 2015. This currency is a token used by the ethereum blockchain, and is second on the list of the most valuable, and popular types of cryptocurrency. As of July 2017, the market capitalization of ethereum was approximately $18 billion. The journey of ethereum has been very turbulent. A major hack occurring in 2016 cause the currency to be split into two. Although the value for the past few months has been as high as $400, at one point a brief crash dropped the value to a low of ten cents.
The distributed ledger system of Ripple was created in 2012. A wider variety of transactions can be tracked using Ripple, and not just the cryptocurrency variety. Banks have used Ripple and include UBS, and Santander. The market capitalization is approximately $6.3 billion.
Litecoin has a lot of similarities to bitcoin, but the movement in the development of new innovations has been much faster. This includes faster processes, payments, and a larger amount of transactions. Litecoin’s total value is approximately $2.1 billion.
The Uses of Cryptocurrencies
Cryptocurrencies have a reputation for both security, and anonymity. It is currently impossible to reverse, or fake a transaction, and the fees are generally very low. This makes cryptocurrency more reliable than standard currency. Since cryptocurrency has a decentralized nature, it is readily available to everyone. Although banks are often exclusive for the individuals they permit to open an account, cryptocurrency is not. Since the cryptocurrency markets can easily soar, this form of cash can turn a little investment into a large amount over-night. The opposite also holds true, and anyone investing in cryptocurrency must be aware the market can be volatile, and there are risks involved when purchasing the currency. Cryptocurrency has been associated with activities of an illegal nature due to the anonymity factor. This is especially true on the dark web, and users should take the connotations into consideration before purchasing cryptocurrency.