The term “cryptocurrency” comes from the encryption methods used to safeguard the network. A cryptocurrency is a cryptography-secured digital or virtual currency, which makes it almost impossible to counterfeit or double-spend.
What is Cryptocurrency?
Many cryptocurrencies are decentralized blockchain-based networks, a distributed database implemented by a disparate computer network. A distinguishing characteristic of cryptocurrency is that every central authority normally does not issue them, making them potentially immune to government intervention or exploitation. As market rates for cryptocurrencies are focused on supply and demand, the rate at which a cryptocurrency can be exchanged for another currency can differ widely, as a high degree of scarcity is guaranteed by the nature of several cryptocurrencies. Click here to learn more about cryptocurrencies.
Bitcoin, founded in January 2009, is a digital currency which follows the ideas set out by the enigmatic and pseudonymous ‘Satoshi Nakamoto’ in a white paper. The identity of the person or individuals who invented the technology is still a mystery.
Bitcoin provides the promise of lower transaction costs than conventional online payment systems and it is regulated by a decentralized authority, unlike government-issued currencies. A form of money that is entirely virtual is Bitcoin, sometime also referred as cryptocurrency, virtual currency or digital currency. It’s like a version of cash online. People can send bitcoins to your digital wallet or you can send them to other individuals.
There are no actual bitcoins, just balances maintained on a public ledger with open access for all. A huge amount of computational power verifies all bitcoin transactions. Bitcoins are not distributed, neither funded as a product by any banks or governments, nor the individual bitcoins are valuable. Bitcoin is very popular and has prompted the launch of hundreds of other cryptocurrencies, collectively referred to as altcoins, despite not being a legal tender. The abbreviation for Bitcoin is typically “BTC.” Click here to read more about what Bitcoin is and how it works.
Ethereum is an open-source, decentralized software framework based on the blockchain used by its own cryptocurrency, ether. This makes it possible to create & run Smart Contracts and Distributed Applications (ĐApps) without any downtime, fraud, control or intervention from a third party.
Ethereum was suggested by a programmer Vitalik Buterin in 2013. In 2014, development was crowdfunded, and on 30th of July 2015, the network went live with 72 million coins mined. Turing-complete scripts can be run and decentralized applications can be run by the Ethereum Virtual Machine (EVM). For decentralized financing, Ethereum is used and has been used for many initial coin offers.
In a third-party project called ‘The DAO’ in 2016, a hacker exploited a flaw and stole ether for $50 million. As a consequence, the Ethereum group voted to undo the theft and Ethereum Classic (ETC) started as the original chain to hard fork the blockchain.A series of upgrades called Ethereum 2.0 has begun to be implemented by Ethereum, which involves a transition to stake proof and an increase in transaction throughout by sharding. Read more about Ethereum in this article.
Ripple, is a US-based technology company, and a real-time gross settlement system, currency exchange and remittance network developed by Ripple Labs Inc. “secure, instantly and nearly free global financial transactions of any size with no chargebacks. By market value, Bitcoin and Ethereum are the two most valuable cryptocurrencies in the world, but Ripple, the third most valuable, stands out. Ripple’s platform is designed to make transactions easier and simpler for banks, making it a more prevalent crypto-currency choice for larger financial institutions. Although the reference to the XRP cryptocurrency is also used by Ripple.
Ripple was developed by Jed McCaleb and created by Arthur Britto and David Schwartz, who then approached Ryan Fugger, who debuted in 2005 as a financial service to provide members of an online community through a global network with safe payment options. A framework named Open coin that would become Ripple was developed by Fugger. In order to allow financial institutions to move money with negligible fees and wait-time, the company has developed its own type of digital currency known as XRP. In 2013, the company recorded interest from banks in using its payment system. Learn more about Ripple here.