Over the last years, people are becoming more interested in the cryptocurrency topic. The use of cryptocurrencies has gained more value and understanding from the public due to the amazing advantages it can offer. However, people tend to stray away from doing cryptocurrency transactions due to the lack of comprehensive knowledge about it.
This article will help give you an initial encounter about the real meaning of cryptocurrency and its purposes.
What is Cryptocurrency?
The word “crypto” is taken from the word “cryptography” which pertains to the technology that keeps safe information and hides it from intruders. In world history, cryptography is known as a tool to send exchange secret messages and information by the Allied Forces in the late World War 2.
Cryptocurrency is a digital cash that is programmed through the use of innovative encryption methods known as cryptography. Cryptocurrency was first introduced in 2009 through the creation of Bitcoin. Take a look at KINESIS
The First Crypto Currency: Bitcoin
Bitcoin was revealed through a white paper online by a so-called Satoshi Nakamoto. However, it was later debunked that the real Bitcoin creator’s name is not Satoshi Nakamoto. To this day, nobody has the know-how of who is the real geek behind the first cryptocurrency.
Bitcoin has made a significant attention over the years and attracted a large number of investors and media companies in 2013 when it reached the value of $266 per bitcoin. However, after reaching a value of over $2 billion, it projected a decline of 50% in its value due to the raging argument about the future cryptocurrencies.
The act of verifying transactions related to Bitcoin is called mining. Verified transactions of Bitcoin are then stored on an encrypted database called a blockchain.
People nowadays desire to read more about cryptocurrency; many would like to know more about the other types besides Bitcoin.
2 More Common Types of Cryptocurrency
Majority of the Altcoins are considered as a close substitute of Bitcoin with minor alterations. Just like Bitcoin, Altcoins also use blockchain to store verified transactions; however, there are thousands of Altcoins on the market nowadays and not all of it are alternates to Bitcoin as there are a few that are extremely different in terms of algorithms, purpose, and goals.
Factom is a type of Altcoin which is completely different from Bitcoin; it uses POS (proof of stake) which means the people who do transactions with Factom are called stakers and not miners.
A token is mainly used on decentralized applications (dApps). Unlike Bitcoin and Altcoin, a token is a completely different type of cryptocurrency in a sense that it does not have a blockchain.
You can use tokens purchase stuff in the dApp or can be used for discounts and as a digital voting fee. Tokens have a price value which people can either buy or sell for a certain amount.
Cryptocurrency is definitely an interesting topic in today’s technological world. If you want to gain more knowledge and land on an article that is a must read about cryptocurrency, check out https://kinesis.money/en/guides/what-is-cryptocurrency/.