What is Cryptocurrency?

Cryptocurrency refers to digital money; this is a type of currency that can be used to carry out transactions between individuals regardless of their location. Cryptocurrencies also referred to as virtual currencies were created by private individuals or groups, and they are not regulated by national governments. Cryptocurrencies are considered an alternative means of financial exchange that exist beyond the boundaries of monetary policy.

With cryptocurrencies, cryptographic protocols and complex codes are used to encrypt sensitive data transfers. Cryptocurrency developers build protocols on advanced mathematics and engineering making it difficult for the system to be duplicated or hacked into. The protocols also protect the identities of crypto users thus making transactions and fund transfer challenging to trace to specific groups.

Cryptocurrencies work with a decentralized control; this means that the supply and value systems are controlled by the activities of users and complex protocols built with codes. No central regulatory authorities are monitoring the process. Miners can also leverage on the computing power to record transactions while creating new cryptos paid by other users.

Additionally, cryptocurrencies can be exchanged for fiat currencies online. Every coin has a variable exchange rate with the currencies in the world such as Dollars, British Pound, European Euro etc. You should know that cryptocurrencies are vulnerable to hacks and thefts perpetrated by
cybercriminals.

However, there is a finite supply of cryptocurrencies. There are specific instructions on the source codes that outline the exact number of units that will ever exist. It has become increasingly difficult for miners to produce crypto units and when the limit is reached new cryptos will no longer be produced.

One feature of cryptocurrency is the fact that transactions can be done speedily across borders. With fiat currencies, there are no immediate assurances of recipients getting funds, especially concerning international payments. These particular challenges with fiat are taken care of with crypto coins as it offers a safer, faster and more reliable way of transacting funds. There is also the elimination of third parties with transactions as the numerous paperwork and bankers needed to make transfers possible with fiat aren’t required with cryptocurrencies.

Cryptocurrencies work effectively through the source codes and technical controls that support its systems. There are several types of crypto coins available currently in the market. The Bitcoin created an avenue for these coins to thrive as such other types of coins has made the market much more flexible. Users now have a pool of coins to choose from before making investment decisions.

Before you decide to invest with any coin, you will have first to carry out research first and ensure that you are making the right decision. The cryptocurrency market is a very volatile one that demands a lot of caution. Start investing, trading or buying with tiny sums of money. Starting small will help you study the market, learn and make progress as you trade.

Cryptocurrencies are quite volatile, but they have a lot of benefits for investors who can be smart with their investments. Before we get to the interests of cryptos, you should understand the importance of being careful with money before investing. Unlike other investment options, if you lose cryptocurrencies, you lose them for them. So, it is essential that you use the money you can let go of smoothly before making the investments. Always utilize money that wouldn’t cause a strain on you financially should anything go wrong. By being mindful with your crypto investments will help you make the right decisions with the right coins.

Most cryptocurrencies are crafted for deficiency; this is a feature that shows the extent of units that will ever exist. Crypto coins are very valuable tenders, and recently, they have proven to compete in terms of value with fiat. They do offer inflation protection which is unavailable to fiat currency users.

Cryptocurrency transactions are speedy. The average crypto transfer that is done on an international level is faster than a domestic transfer done on the same level. When you transfer funds to someone else, you will see the transaction get confirmed, and the recipient receives it within minutes.

There are two significant features of cryptocurrencies that make it very attractive for users; these are privacy and anonymity. Cryptocurrency users can employ the use of pseudonyms that are not connected to their personal information or accounts of users. There are layers of protections made possible by the crypto-security which ensures that personal details are not utilized nor compromised.

In some countries, it is always easy for those in authorities to freeze the assets and private bank accounts of very wealthy individuals especially those who are in violation of the ruling party’s decisions. Cryptocurrencies are immune from authoritarian caprices, the funds and records for cryptos are stored in various locations around the world. So, this means that it will be impossible for the government to take over the assets or investment of crypto users.

The security of cryptocurrency makes it easier for payment to be authenticated thus eliminating the need for other payments processes that attract extra charges. Cryptocurrency charges are usually less than 1% of the transaction value, and this competes successfully against the 1.5% to 3% paid for credit card processors and PayPal.

International transactions are not handled differently from domestic ones. Deals with cryptos are free or come with a nominal fee regardless of where the senders and recipients are located. Users of fiat currencies always must pay some special fees for international transactions, and at the end of the day, such transfers can be delayed.

With cryptocurrencies, there are no third parties. You get to transact with the recipient of your funds directly thus eliminating the stressful processes that are caused by third parties in banking institutions. This feature of the absence of third parties makes it possible for investors and users of crypto coins to trust the process even more and experience seamless transactions. The benefits of cryptocurrencies make it a desirable investment option. With cryptocurrencies, you can get the best out of the most exciting investment offer that is taking over the world.

Notable Cryptocurrencies and Tokens

There are many cryptocurrencies that either exist as blockchains in themselves or as tokens recorded in smart contracts on other blockchains, usually on Ethereum’s public chain. Onchainfx.com and Coinmarketcap.com do a good job in cataloguing these if they trade over a certain amount of volume per day.

Currency tokens (Primarily used as Money/Store of Value):
• Bitcoin (BTC) - the original cryptocurrency and store of value, created by pseudonymous Satoshi Nakamoto, launched in 2009.
• Ripple (XRP) - a token used to move value across the Ripple network, designed as a currency that was initially described to compete against banks then to be used by banks to improve foreign exchange and international payments. Created in 2012 by OpenCoin (rebranded to Ripple Inc in 2015).
• Litecoin (LTC) - an early Bitcoin clone with faster blocks and a different mining proof-of-work. Called ‘Silver to Bitcoin’s Gold’ by its founder Charlie Lee who announced that he sold all of his Litecoin in Dec 2017.
• Zcash (ZEC) - a privacy focused coin using advanced cryptography called zero knowledge proofs to shield transaction data. Created by Zooko Wilcox-O’Hearn in 2016.
• Dash (DASH) - another privacy focused coin, created as XCoin in 2014 by Evan Duffield, renamed Darkcoin, renamed DASH.
• Monero (XMR) - yet another privacy focused coin, uses ring-signatures to obscure payer and recipient addresses. Launched in 2014.

Platform tokens (i.e. those used as gas to power smart contracts):
• Ethereum (ETH) - the original smart contract enabled blockchain platform, created by a Vitalik Buterin and launched in 2015.
• Ethereum Classic (ETC) - fork of Ethereum which didn’t bail out DAO investors. Proponents like immutability. Forked from Ethereum in July 2016.
• New Economy Movement (NEM) - a blockchain with ‘smart assets’.
• EOS (EOS) - a new blockchain structure designed to be more scalable than Ethereum.

Utility tokens (Built for Specific-Use Networks):
• Augur (REP) - a token used for betting on things on a ‘prediction market,’ i.e. a betting platform. Launched in 2015 from San Francisco.
• Siacoin (SC) - a token used for paying for encrypted decentralised file storage. Launched in 2015.
• Golem (GNT) - a token used for paying for decentralised computations & calculations. Launched in 2016.
• Gnosis (GNO) - another prediction market coin. Launched in 2016 from Germany.

Brand tokens (Specific-Use on Single Entity’s Network):
• Basic Attention Token (BAT) - Token used to make micropayments in a web browser called Brave. Launched in 2017.
• Civic (CVC) - Something to do with identity verification on the blockchain. I hope it solves the problem of having too many passwords. Launched in 2017.
• Steem (STEEM) - Token used for making micropayments on social media and forum sites. Launched in 2016.

This is just a short list of the many tokens and platforms that exist today.