CRYPTOCURRENCY

What is a cryptocurrency?

A cryptocurrency (or crypto currency or crypto for short) is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. It typically does not exist in physical form (like paper money) and is typically not issued by a central authority. Cryptocurrencies typically use decentralized control as opposed to centralized digital currency and central banking systems. When a cryptocurrency is minted or created prior to issuance or issued by a single issuer, it is generally considered centralized. When implemented with decentralized control, each cryptocurrency works through distributed ledger technology, typically a blockchain,  that serves as a public financial transaction database.

Bitcoin, first released as open-source software in 2009, is the first decentralized cryptocurrency. Since the release of bitcoin, other cryptocurrencies have been created.

Crypto-currencies

Bitcoin isn't the first cryptocurrency to emerge, but the pre-Bitcoin experiments have all ended in failure. Mention may in particular be made of DigiCash, CyperCash and E-Gold.

Cryptocurrencies were popularized thanks to Bitcoin and its creator: Satoshi Nakamoto. There are now several thousand of them, but beware - 99% have no real use and will be quickly forgotten. They are also given the names of virtual currencies, crypto-assets, electronic currencies or digital currencies. The second most famous crypto is Ethereum with its symbol ETH. Each cryptocurrency has its symbol (ticker in English), that of Bitcoin is BTC.

What is a cryptocurrency? It is an asset that is traded peer-to-peer (P2P) without trusted third parties such as banks. They do not have a physical medium such as coins or banknotes, are not regulated by a central body and are not indexed to the dollar or gold for example. These new electronic currencies use blockchain technology to transfer the ownership of cryptos between their different owners. These cryptocurrencies are therefore only sequences of numbers whose ownership is transferred from one person to another. It is now possible, thanks to cryptos and the blockchain to transfer value on the internet! According to the French government, crypto currencies are not currencies because they are too volatile, not forced to be accepted by traders and not considered as a store of value. Who knows, that may well change soon. In 2017 and 2018 cryptocurrencies experienced an incredible boom with a strong popularity for fundraising or ICOs. Raising crypto funds allows anyone, anywhere in the world to invest in a project. Currently the trend of fundraising in cryptocurrencies has clearly decreased, however the market capitalization of these, and in particular of BTC, continues to increase. More than 460 billion dollars for Bitcoin on December 26, 2020. Financial institutions are increasingly interested in it with many investments from specialized funds and companies.

These are the developers, known or anonymous, who develop and develop these digital assets. They choose the properties of the latter: the number of tokens or coins in circulation, the speed of transactions, the reliability (security) of the network ... It is possible to change the rules in certain special cases. Whether small or large, these changes lead to the creation of a new crypto. Thus, Bitcoin split and gave birth to Bitcoin Cash on August 1, 2017.

New crypto-assets are made through a mining process, people agree to lend computing power to secure the cryptocurrency and are thanked with a reward. To find which crypto-currency to mine, you will find more information in our mining section.

If you are looking for information, know that we have analyzed over a hundred cryptos 💪 including many of the top 100.

The main goal of most of these new cryptocurrencies is to solve the problems of the previous ones. We can for example cite Litecoin, which aims to make faster money transfers than with Bitcoin. Ethereum, which specializes in the development of smart contracts, or decentralized applications ... Or a whole bunch of crypto-currencies that aim to increase the number of transactions per second on the blockchain. Other crypto like Ripple, Monero or, the French, Tezos can be mentioned.

The majority of cryptocurrencies use blockchain technologies although other technologies can be used.

If you want to acquire crypto-currencies, whether for an investment or for trading, we advise you to do your research beforehand. For this, we have written dozens of articles allowing you to invest in a safe way or explanations to fully understand the value of these new assets. Once you own cryptos, you will need to store these virtual currencies. On this subject we also have several articles (which you will find below) which will explain how to store them safely.

The Most Common Types of Cryptocurrency

Here’s a list of cryptocurrency types—representing the most popular industry crypto projects (at present):

1. Bitcoin

Possibly the “Kleenex” or “Coca Cola” of all crypto, in that its name is the most recognizable and the most closely associated with the cryptocurrency system.

There are currently  more than 18.5 million Bitcoin tokens in circulation, against a present capped limit of 21 million.

2. Bitcoin Cash

Introduced in 2017, Bitcoin Cash is one of the most popular types of cryptocurrency on the market. Its main difference with the original Bitcoin is its block size: 8MB. Compare that to the original Bitcoin’s block size of just 1MB. What that means for users—faster processing speeds.

3. Litecoin

Litecoin is increasingly used in the same breath as Bitcoin, and it functions practically the same way. It was created in 2011 by Charlie Lee, a former employee of Google. He designed it to improve on Bitcoin technology, with shorter transaction times, lower fees, more concentrated miners.

4. Ethereum

Unlike Bitcoin, Ethereum focuses not as much on digital currency as it does on decentralized applications (phone apps). You could think of Ethereum as an app store.

The platform is looking to return control of apps to its original creators, and take away that control from middlemen (like Apple, for instance). The only person who can make changes to the app would be the original creator. The token used here is called Ether, which is used as currency by app developers and users.

5. Ripple

Ripple is one type of cryptocurrency on the list, but it’s not Blockchain-based  . It’s not meant so much for individual users as it is for larger companies and corporations, moving larger amounts of money (its coinage is known as XRP) across the globe.

It’s more well-known for its digital payment protocol more than for its XRP crypto. That’s because the system allows for transfer of monies in any form, be it dollars or even Bitcoin (or others). It claims to be able to handle 1,500 transactions per second (tps). Compare this with Bitcoin, which can handle 3-6 tps (not including scaling layers). Ethereum can handle 15 tps.

6. Stellar

Stellar focuses on money transfers, and its network is designed to make them faster and more efficient, even across national borders. It was designed by Ripple co-founder Jed McCaleb in 2014 and is operated by a non-profit organization called Stellar.org  .

Its goal is to assist developing economies that may not have access to traditional banks and investment opportunities. It doesn’t charge users or institutions for using its Stellar network, and covers operating costs by accepting tax-deductible public donations.

7. NEO

Formerly called Antshares and developed in China, NEO is very aggressively looking to become a major global crypto player. Its focus is smart contracts .

There are many more cryptocurrencies like these.

What is cryptocurrency: Conclusion

 

The cryptocurrency market is fast and free. Almost every day, new cryptocurrencies emerge, old ones disappear, pioneers get richer and investors lose money. Every cryptocurrency comes with a promise, most of the time a big story to transform the world. Few of them make it through the first few months and most are pumped and sold by speculators and survive like zombie coins until the last holder gives up hope of seeing a return on their investment.

“Within 2 years, I think cryptocurrencies will gain legitimacy as a business transaction protocol, micropayments, and overtake Western Union as the preferred money transfer tool. Regarding commercial transactions, two paths will appear: there will be financial companies that will use them for their free, their almost instantaneous ability to transfer any amount of money and there will be others who will use them. for their Blockchain technology. Blockchain technology offers the most significant benefits in terms of trusted third party auditing, single source of authenticity, smart contracts and colored coins. " - Cody Littlewood, Founder and CEO of Codelitt

The markets are dirty. But that doesn't change the fact that cryptocurrencies are here to stay - and here to change the world. It's already the case. All over the world, people are buying bitcoin to protect themselves from the devaluation of their national currency. Particularly in Asia, a vibrant market for Bitcoin remittances has emerged and the dark net of cybercrime using Bitcoin is booming. More and more companies are discovering the power of smart contracts or tokens on Ethereum, the first real application of blockchain technologies.

The revolution is already underway. Institutional investors are starting to buy cryptocurrencies. Banks and governments realize that this invention is likely to deprive them of all control. Cryptocurrencies are changing the world. Step by step. You can either stand aside and observe or be part of the story in the making.

“If the trend continues, the average person will not be able to buy an entire bitcoin within two years. As global economies experience inflation and markets show signs of recession, the world will look to Bitcoin to protect itself from the turmoil of the crisis and to evade capital controls. Bitcoin is the solution, and cryptocurrency as a whole will never go away, it will be used and accepted more and more as it matures. " - Brad Mills, serial entrepreneur in technology