Cryptocurrency is a medium of exchange and just like electronic money, it is a digital asset. The main difference with other virtual and digital currencies is that cryptography is used for the creation of additional units, for securing and verifying financial transactions and assets.
Another thing that differentiates cryptocurrencies from other established forms of money is the fact that they exist under a decentralized control. Governments and financial institutions have no say in the supply of crypto coins, as opposed to the creation and issuing of new units of fiat money.
The decentralized control of cryptocurrencies is based on the blockchain technology that allows the recording of all kinds of transactions into distributed ledgers. Records are called blocks and they are made secured through cryptography. Once an event has been recorded into a ledger, it cannot be altered on one’s own accord. This makes ledgers an unbiased and secure source of information that cannot be meddled with.
Exactly that characteristic has made distributed ledgers and blockchain technology a viable way to store information of value, regardless of it being financial or something else. Many corporations already try to implement this technology into their working processes. It is still making its first steps, whereas with cryptocurrencies it is a crucial element.
Blockchain networks support the secure operational development of more than 900 known cryptocurrencies up to date. Here are the most popular ones in the vast world of cryptocurrency and crypto trading.
Bitcoin is the first cryptocurrency to get decentralized in 2009. Currently, there are more than 1,200 cryptocurrencies known but this is still the most popular, most lucrative, and with the highest market capitalization. It is a peer-to-peer (P2P) system running on an open-source software, thus removing the need for a middleman. Transactions are verified by independent parties, called nodes and known as miners. All transactions are recorded into a public distributed ledger – the blockchain.
The supply of bitcoins is determined by the process of mining and there is a limited amount of coins that can be mined. Its reliability as a currency has served as an incentive for thousands of vendors and merchants to accept the cryptocurrency as a payment method.
Did You Know?
The price of one Bitcoin is extremely high because of its limited supply and high demand. Currently, one coin is traded for more than $7,000 and the value is expected to increase. That is why it is a good decision to hold Bitcoins as investments.
Ethereum is probably the second most popular of the cryptocurrencies both in name and utilization. It was first introduced in 2015 and it has marked a significant growth since then. Its cryptocurrency token is called ‘ether’. The computing platform of the Ethereum is blockchain-based, public open-source. The computing processes are decentralized.
Ethereum came to be after a public online crowdsale. The crowdfunding process offered ether tokens in exchange for bitcoins. The ether is now traded on cryptocurrency exchanges. It can be used as a payment method on the Ethereum network for fees and services.
The DAO Hack
In 2016 The DAO project was hacked and led to the drop in the value of the Ether coin from $21,50 to $8. After that, Ethereum has marked an upward trend, gaining 5,000% growth in 2017 to nearly $400 in June. Currently, an ETH coin’s value is nearly $300, while the Ethereum Classic (ETC) price is $14,48. The separation into two types of coins had to be carried out after the Dao crash.
Litecoin is probably the cryptocurrency that is closest to Bitcoin. It is an open-source software and a P2P cryptocurrency that was introduced in October 2011.
Litecoin was released by a former Google employee Charlie Lee.
The main differences with Bitcoin are the decreased time for block generation in the blockchain (Litecoin is nearly four times faster when recording payments) and the higher maximum number of available coins. Currently, the price of a Litecoin is around $55. It is among the 5 cryptocurrencies with highest market capitalization. The fully decentralized payment network it provides near-zero costs for payments.
One can purchase Litecoin with bitcoins or with cash. This can be done through cryptocurrency exchanges. Other ways you can trade this cryptocurrency is under the CFD derivative, in which case you do not take ownership over a given amount of tokens. With CFDs, you trade on the value movements of the asset.
Ripple is one of the most diverse networks. It is a real-time gross settlement system, operates as a currency exchange and can be used for remittance. The Ripple Transaction Protocol is built on distributed open-source protocol, a consensus ledger and the Ripple token called XRP. It was initially released in 2012 for the purposes of instantaneous and near-zero cost transactions.
The consensus process guarantees that the network would be able to continue running even if the enterprise behind it is shut down. This is due to the fact that Internet service providers, companies, and MIT among others act as network validators.
Ripple, XRP, and Reliability
The transaction network and its distributed ledger are widely accepted by financial institutions and companies because of the reliability and security it provides. The blockchain technology has been used to store valuable internal information with various characteristics. Its settlement infrastructure has been adopted by payment networks, banks, and big companies.
Just like the rest, Dash is a P2P open-source cryptocurrency. It has undergone a few changes after its initial release. Dash was publicly introduced in 2014 under the name XCoin (XCO). A month later it was rebranded to Darkcoin and in 2015 I was renamed as Dash. Dash stands for Digital Cash.
In the first two days after its initial release, nearly 10% of the total amount of supply was mined – this amounted to 1,9 million coins.
Dash entered the cryptocurrencies field with the aim of becoming the most user-friendly network available. Only time will tell if it capable of achieving that goal. One of its distinctive features is the InstantSend function that enables instant transactions. It also provides the opportunity to make private transactions through the PrivateSend feature. Dash has a decentralized governance as well. This, along with its decentralized budgeting system makes a decentralized autonomous organization. Currently, a single Dash token is valued at nearly $273.
The Variety of Cryptocurrencies
Cryptocurrencies open a world that is lucrative, reliable, and attractive for many people. It is only natural that the number of available cryptocurrencies and blockchain networks would be rapidly growing.
No matter what currency you choose – one of the most popular tokens or a promising beginner, you are bound to enjoy a world of opportunities. With the development of technology, even complete novices can start out in the cryptocurrencies trading world.