Cryptocurrency: what it is and how digital coin emerged - GERCHIK & CO

What is cryptocurrency

06-04-2020

Cryptocurrency is virtual money that does not have any physical form. Thanks to encrypted data that cannot be duplicated, the cryptocurrency is protected against tampering. Coin is the measurement unit of cryptocurrency.

Contents:

1. Cryptocurrency and Its Origin
2. Price of Cryptocurrency
3. How Cryptocurrency Emerges
4. TOP 5 Altcoins
5. Cryptocurrency and Its Peculiarities

Cryptocurrency and Its Origin

Bitcoin was the first digital currency to see the light of day. The world did not know what cryptocurrency was until a mysterious user under pseudonym Satoshi Nakamoto came into the picture in 2008. Fun fact, the mystery behind his identity has remained unknown to this day.

On one of the forums, he introduced the world to his brand-new digital network. He came up with the concept of the network of the future cryptocurrency, having written the code for applications that provided access to it. He shared his solution in 2009. After that, other people dived into it too.

In 2011, the cryptocurrency market was actively developing and Bitcoin took off. Cryptocurrency wallets were created. Cryptocurrency made its way to exchange, and well-known media outlets started showing interest in digital tokens.

Cryptocurrency explained in layman’s terms terms

Price of Cryptocurrency

The price of cryptocurrency is determined by the existing supply and demand in the market.

This is affected by a variety of factors such as:

  • Number of forks;
  • Issuing volumes;
  • Technological develoliment;
  • liossibility to buy crylitocurrency and make liayments with it;
  • News (that can be artificially created);
  • Countries' attitude towards digital money, etc.

All these factors have an impact on the power dynamics in the cryptocurrency market.

How Cryptocurrency Emerges

In essence, cryptocurrency is a reward for solving complex mathematical problems. And that’s exactly what miners are for. Their job is to “mine” coins by completing computational math tasks set by the network.

Miners make sure that the cryptocurrency turnover does not exceed the prescribed norm. In return, they receive cryptocurrency as a reward. This is why the process of cryptocurrency emergence and its trading is perpetual.


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TOP 5 Altcoins

As you may have already guessed, bitcoin is the most popular cryptocurrency. That being said, it would be wrong to answer the question “What is cryptocurrency?” by saying that it is bitcoin, for it’s not the only cryptocurrency out there.

According to CoinMarketCap, there are over 1,100 types of digital tokens today. And if you put all these cryptocurrencies together, their total value will be approximately $133 billion. There’s obviously no point in listing all cryptocurrencies. In this article, we are going to touch on the 5 most popular ones.

All cryptocurrencies, except for bitcoin, are typically called altcoins. Altcoins have been created in order to overcome technical limitations that bitcoin has.

1. Ethereum. The maximum total number of this cryptocurrency is not limited. This is a so-called smart currency, since the amount you specify during the transaction can be withdrawn from the account and kept until all terms and conditions of the transaction are met. This protects it against unauthorized access. Just like bitcoin, Ethereum tokens are created through mining.

2. Ripple. This is a cryptocurrency that was written from scratch and designed to speed up banking transactions. You cannot mine Ripple tokens freely since it is a centralized system where all virtual money already exists and is owned by Ripple Lab.

3. Litecoin. It is a fork of the Bitcoin Core. A distinctive feature of this token is transaction processing speed. It is not that different from bitcoin, but comes short in terms of value and popularity.

4. Dash. This coin stands out due to its complete anonymity. There is no way one can track someone else’s transactions in the Dash system, since transaction data is not published in blocks. The operators, who work on the same principle as the miners, are in charge of the turnover of this cryptocurrency.

5. NEM. NEM coin has its own unique code and Proof of Importance (POI) algorithm. The reward depends on the user’s rating of trust or reputation.

Cryptocurrency and Its Peculiarities

Cryptocurrency exists in a digital environment which means it’s not like fiat money.

1. Independence. The systems that are in charge of cryptocurrency turnover are not regulated by the governments yet.

2. Inveriability. The blockchain technology (a chain of blocks containing information) makes the cryptocurrency transactions inveriable. This minimizes human intervention in the blockchain system, while speeding up the processes.

3. Accessibility. Everyone can see transactions within the blockchain. Plus, you can access it from anywhere in the world via e-wallet.

4. Anonymity. In order to buy, sell and store cryptocurrency, you do not have to disclose your personal information. The account number within blockchain is not associated with its owner, and you don’t need to provide any documents to open one.

 

As the world keeps evolving and even money is now transitioning to cyberspace, cryptocurrency can be a solid investment in the future.

A lot of experts continue to make truly grand predictions for bitcoin growth. And this means that crypto hype is far from dying down. It is never too late to look into cryptocurrency and turn it into a source of income.


What to know:


Do you wish to sell or buy digital tokens profitably?

Read, how to trade cryptocurrency profitably!


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