In 2017, the rallies of cryptocurrencies were crazy and everyone in the market becomes enthusiastic about different cryptocurrencies. If you do not know much about cryptocurrency, this is the article you must read. This article will serve as your entrance to the cryptocurrency world.
Cryptocurrency is a kind of digital assets using cryptography to secure the transactions and to control the creation of additional currencies. Popular examples are Bitcoin and Ethereum, which belong to decentralized cryptocurrencies (transactions are open source, without control of a central entity). Cryptocurrencies are used as transaction fees in the peer-to-peer network, and miners who help validate the blocks using their computing powers will be rewarded with cryptocurrencies.
And before digging deeper, we have to know the technology behind all of these : Blockchain
Blockchain
(from Thomson Reuters)
The above diagram will help illustrate the concept of Blockchain. Blockchain is a distributed database used to record datas. Every single transaction is recorded in the blocks and everyone can check the previous transactions in this open ledger. Each block is linked to the previous block so that the data in particular block cannot be altered without altering all the previous blocks. This ensures the security of the system as it requires network majority to collude in order to disrupt the entire chain. Therefore, with Blockchain technology, cryptocurrencies like Bitcoin can create a transparent and decentralized network without the existence of a centralized authority.
Below are the 3 major cryptocurrencies prevailing in the market
1.Bitcoin(BTC)
Bitcoin was first introduced in 2008 by the pseudonymous Satoshi Nakamotoand the idea was to create “a purely peer-to-peer version of electronic cash which would allow online payments to be sent directly from one party to another without going through a financial institution. The price of Bitcoin has surpassed the gold price in 2017 and currently, it is the cryptocurrency with highest price and largest market capitalization.
2.Ethereum(ETH)
Ethereum was proposed by a 19-year-old programmer Vitalik Buterin at Toronto in 2013 with the vision of building decentralized applications without third parties and becoming the “world computer. Its ‘smart contract’ feature which facilitates online contractual agreements can help eliminate credit risks without the help of a third party. Therefore, Ethereum is also perceived as the killer of modern banking system. Ethereum is now the second largest cryptocurrency in terms of price and market capitalization.
3.Litecoin(LTC)
Litecoin was announced in 2011 by former Google engineer Charlie Lee with the goal of being the “silver” while Bitcoin being the “gold”. The motivation of creating it is to improve upon Bitcoin. As a result, these two cryptocurrencies have many similarities.The key difference is that Litecoin is designed for faster transaction confirmation (on average 2.5 minutes), compared to Bitcoin’s 10 minutes (or more). Hence, Litecoin can handle a much larger volume of transactions than Bitcoin.
