This and That

Cryptocurrency Simplified

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Please note: This article was written before the bull-run of crypto – way back in early August 2017 – it is only published as an example of how your article could look.

What is a cryptocurrency?

It is a virtual currency which is not issued by a central authority – in other words, it is decentralized. Consider it a digital method that acts as an exchange for transactions. It controls the addition of more currency also. All this works using cryptography, so in theory, it should not be counterfeit-able. The best part of cryptocurrency is that no one government can control or authorize its use.

What are the types of cryptocurrency available today?

You may be wondering what is the cryptocurrency available now. And trust me, there are a lot available online today. You may find up to 700 different cryptocurrencies. Here are a few of the more popular ones today.

Ethereum Classic

Let’s take a look at what a few of these cryptocurrencies are:

Bitcoin (BTC)

Your first thought is what is a cryptocurrency all about? The bitcoin is the oldest one available. It was created by Satoshi Nakamoto in 2009. As with most great inventions, it was the unintentional creation. Satoshi Nakamoto actually wanted to create a decentralized digital cash system. More like a Peer-to-Peer network you probably use for file sharing.

Today bitcoins have a market cap around $10 million. The Bitcoin is so popular that all other coins are called altcoins or alternative coins. You won’t find physical Bitcoins anywhere so don’t search for it in the real world! The account for Bitcoins is in the Cloud. Verification for Bitcoins is done by computing using private and public keys. Long strings of letters and numbers are used with a mathematical algorithm which is encrypted. You will have a public key which is like your bank account number and a private one meant only for you to transfer Bitcoins.

Bitcoins are created by people who are called “miners” Since a tremendous amount of processing with special hardware must be done to ensure the transactions and security of Bitcoins, miners receive Bitcoins in exchange for their work. Bitcoins are carefully produced at a pre-determined rate.

The creation of Bitcoins is carefully monitored and reduced every year from the previous year. The plan is to stop producing Bitcoins at 21 million BTC. When this number is reached, miners will probably be paid a transaction fee.

Bitcoin value will increase as its users increase just like with physical money. So supply and demand will decide the value of your bitcoins. You may be wondering what is a cryptocurrency used for? It is used for online sales and transfer right now. The market for bitcoins is small right now, so the market value of bitcoins is unsteady. But since it is produced in limited numbers, as demand goes up, expect prices to rise.

Your bitcoins may gain or lose value just like any other currency can succeed or fail. Technical problems, competition or even politics can play a role in reducing demand for bitcoins. The main feature of bitcoins is that they have been around for years.

Litecoins (LTC or XLT)

This virtual currency was created in 2011 by an MIT graduate – Charles Lee. He was also a former Google engineer. It is an open source payment system, also not controlled by any one central authority. It uses scrypts and is based on Blockchain Technology. It’s an easy way to send and receive money as there are no fees or other charges. Your transactions will be put on an open ledger called the Blockchain so there is no waiting period for verification of your Litecoin tradings. You can transfer Litecoins to potentially anyone or anywhere in the world for a very small fee compared to that charged by bank transfers, credit card companies, or some other online process. The transfer will be instantaneous, as easy as sending an email. Use a Litecoin wallet to send and receive you bitcoins. Its production is limited to 84 million LTC so that there will be a minimum chance of inflation.

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What is a cryptocurrency like Litecoins used for?

Litecoins are available on litecoin exchanges in exchange for other currencies. The fastest way to get Litecoins is with Bitcoins. Buying them with currency may take time as clearing wire transfers take days. Litecoins can also be mined with standard computers by experienced miners. The infrastructure of the Litecoin market isn’t developed at the same level as that of the BTC setup. So expect fewer varieties in the availability of wallets. Some online wallets may charge you for storing Litecoins so know what you are dealing with before you get one of those.

With the latest tech upgrade prices for Litcoins were surging in 2017. An upgrade called SegWit (Segregated Witness) has made the value of Litecoins surge. By doing this upgrade individual Litecoin transactions will have fewer data associated with them.  Basically, Litecoin miners have accepted the upgrade and have a renewed interest in the LTC. Litecoin is now supported on the popular cryptocurrency exchange Coinbase, giving it an additional boost.

Ethereum (ETH)

This cryptocurrency was introduced in 2015. Ethereum is a software platform which is decentralized and runs Smart Contracts and Distributed Applications (DApps). The value of these two applications is that there is no fraud, interference or downtime on this platform. Miners make Ether which is a cryptocurrency token to develop and run smoothly in the Ethereum platform. Chiefly developers use Ether to pay for services on the Ethereum network. It enables them to work on decentralized applications.

What is a cryptocurrency like Ether for?

A DApp is used for a particular purpose, like how Bitcoins are a DApp that is used as a P2P electronic cash system which has Bitcoins for payment. So with Ethereum, a service can be decentralized. For example, you take a loan from a bank and the contract can be decentralized to run automatically with no chance of fraud or interference. Think of its potential use in voting, title registration, or regulatory compliance.

After an attack on a project DAO which was developing a Smart Contract for investors to use, millions of dollars worth of Ether (ETH) was stolen. Ethereum was split into Ethereum and Ethereum Classic. The former has a market capitalization of more than $4 billion.

What is a cryptocurrencys future?

We have all seen the surge in the value of the Bitcoin. It has been beyond expectations in the past few months. The future only seems brighter as countries and finance institutions scramble to get regulations in place, so I guess there is some speculation that cryptocurrency isn’t going away any time soon.

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