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.