Cryptocurrency is a new term that has been coined to describe digital currencies. These currencies are not backed by any government or central bank. The value of these currencies is determined by supply and demand. In other words, as more people want to invest in this currency, the price increases. If fewer people want to invest in it, then the price decreases. Cryptocurrency is not regulated by any central authority, and thus there are no rules to govern its use.
There are several types of cryptocurrencies. Some of them are:
Bitcoin – is the most popular type of cryptocurrency. It was created by an unknown person using the pseudonym Satoshi Nakamoto. The total amount of Bitcoins in existence is limited to 21 million. Bitcoin was created in 2009 and is traded on online exchanges. There is a fee for every transaction made in Bitcoin. This fee is paid in Bitcoins.
Ethereum – is a decentralized platform that runs smart contracts. Smart contracts are self executing contracts that are programmed to execute specific tasks when certain conditions are met. For example, a smart contract could be programmed to pay a reward to someone who completes a task.
Ripple – is a payment system based on blockchain technology. Ripple uses a consensus algorithm called Proof of Stake (PoS). This means that the more Ripple you own, the more influence you have in determining the value of the currency.
Litecoin – is a peer-to-peer Internet currency that allows users to transfer funds directly from one account to another without going through banks or other financial institutions.
Dash – is a peer-to peer Internet currency that offers instant transactions. Dash also provides a privacy feature called PrivateSend.
Monero – is a decentralized cryptocurrency. It uses the CryptoNote protocol. This protocol makes it possible to create anonymous transactions. Monero is also used for payments between merchants and customers.
Dogecoin – is a peer-2-peer Internet currency. Dogecoin is a spinoff of Litecoin. Dogecoin is often referred to as the “joke coin”.
Zcash – is a decentralized cryptocurrency. Zcash uses the Zerocoin protocol. The Zerocoin protocol is designed to provide anonymity for the owner of the coins.
IOTA – is a distributed ledger that enables fast and secure transactions. IOTA is a completely decentralized network that is owned by no one.
NEO – is a smart contract platform that is based on the blockchain technology. NEO is the first smart contract platform to implement a governance system.
Qtum – is a smart contract platform. Qtum uses the proof-of-stake consensus algorithm.
Steemit – is a social media platform that allows users to earn cryptocurrency by writing articles. Steemit is based on the blockchain technology.
