Saturday, 25 June 2016

CRYPTOCURRENCY

CRYPTOCURRENCY

CRYPTOCURRENCY

A cryptocurrency is a digital or virtual currency that uses cryptography for security.

It is a form of electronic currency, that uses mathematical algorithms to secure transactions.
these algorithms can only be solved by a group of people called miners who specialise in decoding
these transactions for a fee they solve the algorithms by using computers


that are capable of handling the decoding process of the verifying and recording
the transactions of these currencies in a public ledger called a blockchain
A cryptocurrency is difficult to counterfeit because of this security feature.
A defining feature of a cryptocurrency is that it is not issued by any central authority,
rendering it theoretically immune to government interference or manipulation, it is completely decentralised and controlled only by ownership.
The anonymous nature of cryptocurrency transactions has made them well-suited for a host of nefarious activities such as money laundering and tax evasion, this anonymous nature is as a result of the fact that cryptotransactions cannot be traced however there are a lot of advantages.
Cryptocurrencies make it easier to transfer funds between two parties in transactions;
these transfers are facilitated through the use of public and private keys for security purposes.
These fund transfers are done with minimal processing fees, enabling users to avoid the steep fees
charged by most banks and financial institutions for wire transfers.
A major drawback of cryptocurrencies is that because they are virtual and do not have a central repository,
a user’s digital cryptocurrency balance can be wiped out by a computer crash if a back-up copy of the holdings does not exist.
Since prices are based on supply and demand, the rate at which a cryptocurrency can be exchanged for another currency can fluctuate widely.

BTC AND ALTCOINS

The first cryptocurrency to capture the public imagination was Bitcoin, which was launched in 2009.
Bitcoin's success has spawned a number of competing cryptocurrencies such as Litecoin, Etherium, etc.

BITCOIN


A payment system invented by Satoshi Nakamoto, who published the invention in 2008 and released it 2009.
The system is peer-to-peer and transactions take place between users directly, without an intermediary.
These transactions are verified by network nodes and recorded in a public distributed ledger called the block chain,
which uses bitcoin as its unit of account. Since the system works without a central repository or single administrator,
the U.S. Treasury categorizes bitcoin as a decentralized virtual currency.
Bitcoin is often called the firstcryptocurrency but it is more correctly described as the first decentralized digital currency.
Bitcoin is the largest of its kind in terms of total market value.
Bitcoins are also created as a reward for payment processing work in which users offer their computing power to verify and record payments
into a public ledger. This activity is called mining and miners are rewarded with transaction fees and newly created bitcoins.
Besides being obtained by mining, bitcoins can be exchanged for other currencies, products, and services.
When sending bitcoins, users can pay an optional transaction fee to the miners .

LITECOIN

Litecoin(LTC) is also a peer-to-peer cryptocurrency and open source software project released under theMIT/X11 license.
Inspired by and technically nearly identical to bitcoin(BTC), Litecoin creation and transfer is based on an open sourceprotocol and is not managed by any central authority.
After Bitcoin and Ethereum, Litecoin is currently the fouth-largest true cryptocurrency by market capitalization close to 200 Million dollars.
Litecoin was released via an open-source client on GitHub on October 7, 2011 by Charles Lee, a former Google employee.
It was a fork of the Bitcoin-Qt client, differing primarily by having a decreased block generation time, increased maximum number of coins,
different hashing algorithm (scrypt, instead ofSHA-256), and a slightly modified GUI.

ETHERIUM

Ethereum is a public blockchain platform with programmable transaction functionality.
It provides a decentralized virtual machine that can execute peer-to-peer contracts using a cryptocurrency called ether.
Ethereum was initially proposed by Vitalik Buterinin late 2013 and in 2014 he described it as
"A Next-Generation Cryptocurrency and Decentralized Application Platform". The development was funded by a crowd sale in August 2014.
and it is currently the second largest cryptocurrency in the world with a a market capital of over 1 Billion dollars currently

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