What is a Cryptocurrency? – You can frequently hear this question from the newbies in finance and technology circles. Through the most recent years, folks are becoming more interested in the cryptocurrency topic. Getting cryptocurrencies has acquired more interest from the public due to its remarkable benefits. Nevertheless, people still stray from cryptocurrency transactions. This is the result of the lack of easy-to-digest detailed Cryptocurrency guides.
This short write-up aims to answer the question “what is a cryptocurrency” and its three common types.
What is a Cryptocurrency?
The word “crypto” is derived from the term “cryptography” which refers to the systems that secure top-secret data from intruders. In world history, cryptography is known as a tool to give top secret posts and information by the Allied Forces in the World War 2.
Cryptocurrency is a virtual money that is designed through the use of ingenious encryption techniques known as cryptography. Cryptocurrency was initially launched in 2009 via the production of Bitcoin
Bitcoin: The First Ever Crypto Currency:
Bitcoin was shared via a white paper online by a mysterious Satoshi Nakamoto. Nonetheless, it was later exposed that the authentic Bitcoin designer’s name was not Satoshi Nakamoto. To this day, no one has the knowledge of who is the actual man or woman responsible for the original cryptocurrency.
Bitcoin has made a significant reach for many years and captivated a large number of financiers and media companies in 2013 when its value reached $266 per bitcoin. Nonetheless, soon after arriving at a market value of over $2 billion, it projected a decline of 50% in its value caused by the endless uncertainties regarding the springing cryptocurrencies.
The action of validating financial transactions associated with Bitcoin is called mining. Authenticated deals of Bitcoin are then secured on an encrypted database known as a blockchain.
Interested people nowadays want to learn more about cryptocurrency; many wish to recognize the other kinds in addition to Bitcoin.
Altcoins: Close Enough to Bitcoin
Altcoins are close alternatives to Bitcoin yet it comes with small-scale modifications. Exactly like people who use Bitcoin, folks who use Altcoins also utilize blockchain for storing validated purchases; on the other hand, there are thousands of Altcoins on the industry nowadays and not all of them are alternates to Bitcoin as some of them are totally incomparable in regards to formulas, purposes, and goals.
Factom is a type of Altcoin that is completely different from Bitcoin; it makes use of POS (proof of stake) which indicates the individuals who do purchases with Factom are referred to as stakers and not miners.
Token: Blockchain-Independent Crypo
A token is utilized mostly on decentralized applications (dApps). Unlike Bitcoin and Altcoin, a token is a truly unique style of cryptocurrency because it does not need to depend on a blockchain. The dApps already take care of the storing and transactional purposes.
You can use tokens to acquire stuff in the dApp or for coupons or online voting fees. Tokens come with a price value that people can either purchase or sell off for a specific value.
Cryptocurrency is undoubtedly an appealing topic in this age’s technological arena. In case you wish to get more information pertaining to cryptocurrency, look into this detailed guide by Kinesis Money: https://kinesis.money/en/guides/what-is-cryptocurrency/.