What is cryptocurrency?

What is crypto?

Cryptocurrency,or what we sometimes hear as "crypto", is a form of digital currency that can be used for payment to exchange online for goods and services. As these Bitcoin alternatives are secured by cryptography, and is close to impossible for counterfeiting or double-spending.

A lot of firms or corporations have issued their own crytpocurrencies, often called as tokens, coins, or crypto coins. These can be traded specifically for the goods or services that the firm or corporation provides.

What are the differences between using digital currencies and using cryptocurrencies?

 

The utmost difference between a cyber currency and a cryptocurrency is that the former is centralized, whereas obviously, the latter is decentralized. What does it mean? Well, to put it in frank words, cryptocurrencies are not issued or backed by any central authorities, in this case, a central bank or government. In place of those authorities, cryptocurrencies "sprint" across a network of computers. As for digital currencies, they hold all the features of traditional currencies, including that they are issued by a central authority, with just one exception, they only exist and can be used in the digital world.

 

Skeptics and Criticisms regarding the use of Cryptocurrency 

Plenty of specialists and experts in the field believe that blockchain technology, or any members of its family would destroy the current eco-system, creating mass disruption in many sectors, such as the financial, and law enforcement sectors. It is therefore these encrypted currencies are continuously hearing skeptical comments and criticisms from surrounding voices. The mass media is concerned that the use of these currencies in the cyber world, since it cannot be tracked or governed, can easily be used in performing illegal activities. Also, the common usage of crypto could also cause exchange rate volatility, the vulnerabilities of the infrastructure underlying them are also main concerns the society has towards the use of these currencies.

 

Legitimate Concerns

It is hard to track transactions done using encrypted money as they run on decentralized networks, which you might have heard of - blockchain technology. This decentralized structure gives them the ability to stay "outside". To make it more understandable, this blockchain technology exists as a distributed ledger that runs across a wide spread of networks that manages and records transactions, creating the most appealing feature of these currencies, namely its secrecy and anonymity. Since these coins are not actually issued by any central authorities, thus using them to transact is theoretically in anyway immune to any government interference or supervision

Exchange Rate Volatility

Like everything else that can be traded in the markets, the market prices for cryptocurrencies are also determined based on their supply and demand. The design of these cryptocurrencies, the way that they are being "created" ensures a high level of scarcity. Therefore, the exchange rate of a cryptocurrency for another currency can be extremely volatile.

Bitcoin, as many of you may be familiar with, the very first invention of its tribe, has gone thru some rocket highs and sharp falls in value, shooting up to an historical high of $19,000 per Bitcoin in Dec. of 2017, then followed by a downward slope to approximately $7,000 in the consecutive months. With the examples shown by Bitcoin, crypto coins are thus considered by a portion of economists to be a short-lived fad or speculative bubble. 

 

Vulnerabilities of the Infrastructure Underlying Crypto Currencies

People are skeptic as to whether cryptocurrencies like Bitcoin are in any regards rooted in any material goods. Various researches and reports, have however identified that the mining of a Bitcoin, that is, the production process of the coin requires an increasingly large amount of effort and energy, and this ends up  directly related to its market price.

Although it is always said that blockchains are highly secured, but as far, no researches show that other aspects included in the crypto coins ecosystem, such as exchanges and wallets, are also immuned to the threat of hacking. As a matter of fact, in the 10 years of Bitcoin history, a few online exchanges have been the subjected to hacking and theft, in some occasions, we are talking of millions of dollars worth of "coins" hacked, stolen.5

Regardless of all above mentioned downsides, a lot of observers still see potential upholds in cryptocurrencies. Say its likelihood in maintaining value against inflation, and facilitating exchange and its ease of transportation as opposed to other forms of currencies. 

 

So, what was the first cryptocurrency? 

The reknowned Bitcoin, is the first cryptocurrency to have been created. It was originated in 2008 by someone or some organization with a pseudonym of  ‘Satoshi Nakamoto’, but did not perform its first transaction until 2009.

 

How many cryptocurrencies are there?

At the moment, there are over 2000 different types of cryptocurrencies available to for trading in the markets, though most have which are small cryptocurrencies with very small value. Below are a list of cryptocurrencies, Of these, Bitcoin is undoubtly the top cryptocurrency, and the most popular cryptocurrency, but there is no way in judging which of the following coins is the best cryptocurrency, as they all have individual appeals.

The 10 Most Important Cryptocurrencies Other Than Bitcoin

 

  1. Ethereum (ETH): The first bitcoin alternative on the list, launched in 2015
  2. Ripple (XRP): currently the third-largest cryptocurrency in the world by overall       market cap, launched in 2012
  3. Litecoin (LTC): launched in 2011, was one of the first cryptocurrencies to pursuit the path of bitcoin and has often been called “silver to Bitcoin's gold.”
  4. Tether (USDT): one of the first and most popular of a group of so-called stablecoins, launched in 2014
  5. Bitcoin Cash (BCH): one of the earliest and most successful hard folk of the original bitcoin, and was born in 2017
  6. Libra (LIBRA): One of the most-hyped cryptocurrencies, not even actually born
  7. Monero (XMR): a secure, private and untraceable currency, launced in 2014
  8. EOS (EOS): Aside from Libra, one of the newest digital currencies to make our list, launched in 2018 
  9. Bitcoin SV (BSV): BSV is a fork of a fork of the original Bitcoin network, launched in 2018
  10. Binance Coin (BNB): the official token of the Binance cryptocurrency exchange platform, launched in 2017