Cryptocurrency
A cryptocurrency or crypto is a virtual currency secured by cryptography. It is designed to work as a medium of exchange, where individual ownership records are stored in a computerised database.
The defining trait of cryptocurrencies is that they are not issued by the government agency of any country making them immune to any interference and manipulation from them.
Definition of Cryptocurrency
In simplistic terms, Cryptocurrency is a digitised asset spread through multiple computers in a shared network. The decentralised nature of this network shields them from any control from government regulatory bodies.
The term “cryptocurrency in itself is derived from the encryption techniques used to secure the network.
As per computer experts, any system that falls under the category of cryptocurrency must meet the following requirements.:
- Absence of any centralised authority and is maintained through distributed networks
- The system maintains records of cryptocurrency units and who owns them
- The system decides whether new units can be created and in case it does, decided the origin and the ownership terms
- Ownership of cryptocurrency units can be proved exclusively cryptographically.
- The system allows transactions to be performed in which ownership of the cryptographic units is changed.
Types of Cryptocurrency
The first type of crypto currency was Bitcoin, which to this day remains the most-used, valuable and popular. Along with Bitcoin, other alternative cryptocurrencies with varying degrees of functions and specifications have been created. Some are iterations of bitcoin while others have been created from the ground up
Bitcoin was launched in 2009 by an individual or group known by the pseudonym “Satoshi Nakamoto. As of March 2021, there were over 18.6 million bitcoins in circulation with a total market cap of around $927 billion.
The competing cryptocurrencies that were created as a result of Bitcoin’s success are known as altcoins. Some of the well known altcoins are as follows:
- Litecoin
- Peercoin
- Namecoin
- Ethereum
- Cardana
Today, the aggregate value of all the cryptocurrencies in existence is around $1.5 trillion—Bitcoin currently represents more than 60% of the total value.3.