Bitcoin, DOGE, Litecoin and Ethereum are being seen as the next big thing in finance and technology. But what are they? This blog breaks down their origins, development and future potential.
The world of digital payments has exploded over the past few years. For something that was once seen as the preserve of young gamers or internet geeks, cryptocurrencies have become a part of mainstream financial markets.
Bitcoin was the first cryptocurrency to hit the market in 2009. Only five years later, Bitcoin was being traded at over one thousand dollars per coin. The currency’s value has been volatile since then, but it is still trading at around $11000 per coin.
The success of Bitcoin created a wave of new cryptocurrencies. DOGE, Litecoin and Ethereum followed in quick succession – all developed by anonymous coders using open source software. While Bitcoin is still far ahead in terms of market share, these other currencies have gained their own following and have been traded at increasingly high prices of their own.
So what makes these cryptocurrencies so attractive?
Bitcoin and the market of other cryptocurrencies are the first digital currencies to be decentralized. The first cryptocurrency, Bitcoin, was invented in 2009, and since then, a number of other cryptocurrencies have come on the scene. For example, Litecoin and Dogecoin were introduced later in 2011, Ethereum came out in 2015 and Ripple was launched in 2012.
Bitcoin is the most common cryptocurrency so far, with a market capitalization that ranges between $100 billion and $200 billion. It’s often referred to as a “peer-to-peer” electronic payment system that operates independently from any central authority like a bank or government.
How does Bitcoin work?
Bitcoin is stored in digital “wallets,” which are like virtual bank accounts that can receive or send Bitcoin. Digital wallets can be stored on your computer or smartphone, but they can also be stored offline. Another important feature of Bitcoin is that it’s not controlled by any central governing authority: It operates based on blockchain technology.
Bitcoin transactions are recorded via “blockchain,” which is a shared ledger where transactions are permanently recorded by appending blocks. All participants within the Bitcoin network get access to this shared ledger. Records cannot be altered retroactively without changing all subsequent blocks as well as requiring consensus from the majority of nodes
Bitcoin is the most famous digital currency, but there are other currencies available. Here’s a look at the digital coin landscape and some of the top coins.
Bitcoin is the world’s first completely decentralized payment network. It was created by Satoshi Nakamoto in early 2009. Bitcoin allows for instant peer-to-peer transactions without any intermediary like banks or PayPal. It’s maintained by a distributed, global network of computers that use blockchain technology to synchronize and store the history of all transactions.
The Bitcoin network currently has a market capitalization of over $350 billion and nearly 18 million coins in circulation. New coins are mined approximately every ten minutes, but this rate will be halved every four years until it reaches zero around 2140. The total number of bitcoins will never exceed 21 million.
Bitcoin was the first digital currency to be created. It is also the most respected, capitalized and traded cryptocurrency in the world.
Bitcoins were created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services.
Bitcoin is an online payment system invented by Satoshi Nakamoto, who published his invention in 2008, and released it as open-source software in 2009.
The system is peer-to-peer; users can transact directly without needing an intermediary. Transactions are verified by network nodes and recorded in a public distributed ledger called the blockchain. The ledger uses its own unit of account, also called bitcoin.
The system works without a central repository or single administrator, which has led the US Treasury to categorize it as a decentralized virtual currency. Bitcoin is often called the first cryptocurrency, although prior systems existed and it is more correctly described as the first decentralized digital currency. Bitcoin is the largest of its kind in terms of total market value.
Bitcoin was the first cryptocurrency and has the longest history. It was created by Satoshi Nakamoto in 2009, who published his whitepaper in 2008 describing a peer-to-peer electronic cash system. In 2011, Nakamoto disappeared from the scene, but Bitcoin continued to grow. Currently it is the most popular cryptocurrency by far.
Bitcoin is easy to use: send money to anyone in the world for free, no questions asked! It is also deflationary because there will only ever be 21 million Bitcoins ever made. This makes it a great store of value and useful for buying things online.
Mining Bitcoin requires powerful computers that perform complex cryptographic calculations to create new Bitcoins. Mining started on CPUs then moved onto GPUs and finally ASICs (Application Specific Integrated Circuits) which are especially designed for mining. Unfortunately ASICs are very expensive and consume lots of electricity so they are out of reach for many people.
Litecoin is based on Bitcoin’s code base but uses a different proof-of-work algorithm called Scrypt which can’t be mined using ASICs like Bitcoin’s SHA-256 algorithm can. This means that it is more accessible to regular people who can mine it with their GPU or CPU at home instead of renting expensive hardware. Another difference with Litecoin
Bitcoin is a distributed peer-to-peer digital currency that can be transferred instantly and securely between any two people in the world. It’s like electronic cash that you can use to pay friends or merchants.
The smallest unit of a bitcoin is called a satoshi. It’s one hundred millionth of a bitcoin (0.00000001) – at today’s prices, about one hundredth of a cent. This could conceivably enable microtransactions that traditional electronic money cannot.
Litecoin is also a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world. Litecoin is an open source, global payment network that is fully decentralized without any central authorities. Mathematics secures the network and empowers individuals to control their own finances. Litecoin features faster transaction confirmation times and improved storage efficiency than the leading math-based currency. With substantial industry support, trade volume and liquidity, Litecoin is a proven medium of commerce complementary to Bitcoin.
What is Bitcoin?
Bitcoin is the first peer-to-peer decentralized digital currency, powered by its users without any central authority or middlemen. An independent individual or group of individuals developed Bitcoin under the pseudonym Satoshi Nakamoto, and released it as open-source software in 2009.
What is a cryptocurrency?
A cryptocurrency is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.
How does it work?
Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system.
Why should I use it?
Using Bitcoin has a number of advantages over traditional fiat currencies such as GBP, USD, EUR etc: you can send any amount of money to anyone in the world at any time without requiring permission from any regulatory body.