The Types Of Cryptocurrency


There are over 800 cryptocurrencies, but we will only discuss the top 5 prominent currencies in the market. The 5 cryptocurrencies are Bitcoin, Ethereum, Litecoin, Monero and Ripple. For this report, we are going to cover only two of the Cryptocurrency – Bitcoin and Ethereum.

Bitcoin : This is the first ever cryptocurrency invented and remains by far the most sought after cryptocurrency to date.

Bitcoin is known as the digital gold standard in the cryptocurrency network. As explained in the previous module, Bitcoin is the pioneer of Blockchain Technology that made digital money possible.
It is the first ever decentralized peer-to-peer network powered by its users without any central authority or middleman which means, no unnecessary costs are included in the digital money transaction.
Over the years of Bitcoin’s existence, its value has fluctuated tremendously from zero to over $2000 per bitcoin to date.
Its transaction volume has also reached 200,000 daily transactions. 
One major advantage that it has over other cryptocurrencies is bitcoins are impossible to counterfeit or inflate.
The reason being there are only 21 million bitcoins created for mining, no more no less.
Therefore, it is predicted by 2140, all bitcoins will already be mined.
Thanks to its blockchain technology, you have ultimate control over your money and transactions without having to go through a third party such as the bank or Paypal.
Bitcoin transactions are also impossible to be reversed.
Therefore, you should only deal with trusted parties as Bitcoin is also used as a means for cyber-crime like dark net markets or ransomware. Next is another widely-usedcryptocurrency in the market.
Ethereum : Created by Vitalik Buterin, it has scored itself the second spot in the hierarchy of cryptocurrencies.
This digital currency launched in 2015 is predicted to surpass Bitcoin and may be the cryptocurrency of the future. Ethereum is currently worth $279 since its launch.
Is Ethereum similar to Bitcoin?
It is in a way, but not really. Like Bitcoin, Ethereum is a part of a blockchain network.
The main difference between the two currencies is that Bitcoin blockchain focuses on tracking ownership of the digital currency while Ethereum blockchain focuses on running the programming code or network.
Instead of having to build an entirely original blockchain for each new application, Ethereum enables the development of thousands of different applications in a single platform.
In the Ethereum blockchain, miners work to earn Ether. Ether is a crypto token that helps run the network.
Another use of the Ethereum blockchain is its ability to decentralize any services that are centralized.
For instance, Ethereum is capable of decentralizing services like loans provided by banks, online transactions using Paypal as well as voting systems and much more.
Ethereum can also be used to build a Decentralized Autonomous Organization (DAO).
A DAO is a fully autonomous organization without a leader.
DAOs are run by programming codes on a collection of smart contracts written in the Ethereum blockchain.
DAO is designed to replace the structure of a traditional organization and like Bitcoin, eliminating the need for people and a centralized control.
What are the most obvious benefits of Ethereum?
Firstly, a third party cannot make any changes to the data. The system is also tamper and corruption proof.
This is because Ethereum is built based on a network formed around a consensus as a result, making censorship impossible.
Secondly, just like Bitcoin, Ethereum is backed up by secure cryptography. Therefore, the applications are well protected against any form of hacking.

Comments

Post a Comment

Popular posts from this blog

Bitcoin And Cryptocurrency Investment

The reason why cryptocurrencies are such in demand right now is because Satoshi Nakamoto successfully found a way to build decentralized digital cash system. What is a decentralized cash system? A decentralized system means the network is powered by its users without having any third party, central authority or middleman controlling it. Neither the central bank, nor the government has power over this system. The problem with a centralized network in a payment system is the so called “double spending”. Double spending happens when one entity spends the same amount twice. For instance, when you purchase things online, you have to incur for unnecessary and expensive transaction fees. Usually, this is done by a central server that keeps track of your balances. Apart from the cryptocurrency network is verysecure and is run through a decentralized network, there are other properties which projects why cryptocurrencies may be the most talked about topic in town. It is now viewed as a...
Read more

Why Buy Cryptocurrency

As a digital asset that serves users online, Cryptocurrency has many appealing benefits. Some of this is thanks to the Blockchain Technology previously mentioned. It is a strictly monitored process with encrypted transaction and control thus, making this online money a thing for the future. There are 4 top advantages ofCryptocurrency but for this report, we are going to talk about only 2. No Third-Party Involvement : The first advantage of Cryptocurrency is its well-known ‘No Third-Party Involvement’. There’s always a pattern when using traditional money to buy yourself a new property, setting up your own business, or buying a new car. One way or another, the process requires a third-party involvement. We are talking lawyers, owners and some others external factors such as, delays, documentations and extra fees. This in general will consume unnecessary time, money and energy to the point of giving up. A good example of this scenario would be you...
Read more

The Future Of Cryptocurrency

Now we will finally touch upon the future of Cryptocurrency. These digital currencies have been said to be able to capture the world of online finance. With the blockchain technology behind it, the future of Cryptocurrency is showing a prosperous potential. Starting 2017, the alternative currencies will need to watch its prices closer than usual. Studies show that Bitcoin experienced a drop in its price. It seems like a cheaper cryptocurrency by the name Ether, reached its highest at $40 a unit. That’s right. Although the mechanism behind Ether prevents it from being used as a direct payment method, this cryptocurrency seems to have brighter future ahead. This is all thanks to its smart contract concepts. On the other hand, cryptocurrencies who is concerned over privacy are starting to gain more prominent favor amongst users. Bitcoin, unfortunately despite their security measures, it continues to have loopholes that can be exploited for access to user...
Read more