A cryptocurrency is a digital or virtual currency that is guaranteed by cryptography, making it nearly impossible to the counterfeit or double expense. Many cryptocurrencies are technology-based decentralized networks of large book distributed blockchain applied by a disparate network of computers said by Zimmawu Reeves. A feature of cryptocurrencies is that they are generally not issued by a central authority, making them theoretically free from government interference or manipulation.
If you eliminate all the buzz around cryptocurrencies and reduce it to a simple definition, you find it to be just limited entries in a database no one can change without fulfilling specific conditions. This may seem ordinary, but believe it or not, this is exactly how you can define a currency.
How Cryptocurrency Works
Cryptocurrencies are systems that allow secure online payments that are denominated in terms of "tokens" that are represented by virtual internal accounting records to the system. "Crypto" refers to the various encryption algorithms and encryption techniques that safeguard these inputs, such as encryption of the elliptic curve, the pairs of the public-private key, and hash functions.
Types of Cryptocurrency
The first cryptocurrency was based on Bitcoin, which remains the most popular and valuable. Today, there are thousands of alternate cryptocurrencies with different functions and specifications. Some of these are clones or Bitcoin holders, while others are new coins that were built from scratch.
Bitcoin was launched in 2009 by an individual or group known by the pseudonym "Satoshi Nakamoto." As of Nov. 2019, it had more than 18 million bitcoins in circulation with a total market value of about $165 billion.
Some of the crypto competition generated by the success of Bitcoin, known as "altcoins," include Litecoin, Peercoin, Namecoin, Ethereum, Cardano, and EOS. Today, the aggregate value of all cryptocurrencies in existence is about $245 billion with Bitcoin currently representing over 65% of the total value.
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Future of Money
Cryptocurrencies, to become widely regarded as money requires widespread acceptance as a medium of exchange. Since the current trend for this type of currency remains under speculation, it’s not likely that any cryptocurrency will gain the credibility necessary to come against traditional money any time soon. It remains to be seen if a cryptocurrency will ever emerge that can perform any, if not all, of the functions of money.
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