Bitcoins are one category, and perhaps the most well-known of cryptocurrency that has recently been reported in the news again due to fluctuations of their value. But what exactly is cryptocurrency?
Cryptocurrency is a type of currency like no other that came into existence in 2009 with the creation of Bitcoin. While it has physical value, it has no tangible existence; it exists purely in the digital world. Encryption techniques such as cryptography are used to generate, regulate and transfer the cryptocurrencies. The value of most grow from their original worth, as Bitcoin famously has, making them a worthwhile, but sometimes risky investment.
A Brief History of Bitcoins
As of September 2017, there are thousands of different types of cryptocurrency, but it was bitcoins that were the pioneers.
Bitcoins were the first type of cryptocurrency to be developed in 2009 by the Satoshi Nakamoto. Their original base value in 2009 was worth hardly anything. Over the years it steadily increased, but would sometimes decrease in value some months.
In 2011, the worth increased to $1, then grew exponentially so that in July 2011 it was 1 bitcoin for $31, but before the end the worth dropped to 2, before growing to 13 come 2012.
The growth that occurred in the following years is astonishing, with 1 bitcoin converting to $266, and then in 2014, fluctuating between $700 and $100, ending at $700. 2015 saw a decrease with worth between $300-$500, an increase in the following year to $600, and reaching the high of $17,900 late 2017. As of February 2018, the worth unfortunately has decayed to $6,200. While still a significant amount it is an extremely sharp decline in value. With how the value of bitcoins decreases and increases sporadically, it is impossible to predict any future growth or decline.
While Bitcoin inarguably has monopolized the cryptocurrency market, there are alternatives that still have importance and value.
Litecoin is one such variant. Launched in 2011, Litecoin has been referred to as “silver to b
Bitcoins gold”. It has a faster transfer rate than Bitcoins due to is faster block generation.
Ethereum was launched in 2015, and in the cryptocurrency industry it is second only to Bitcoin. However Ethereum acts more like an app than it does a currency.
Late 2016 saw the release of ZCash, an open-source cryptocurrency. While ZCash offers more security and privacy, information involved in transactions such sender, recipient and the amount are kept private.
Dash, originally founded under the name “Dark Cash” works in a similar manner, known as a more private version of Bitcoin. Because of its advanced mastercode network, transactions are practically impossible to trace.
Ripple was released in 2012, and is a network that allows instant and low-cost international payments. It is less-taxing on computers as it doesn’t require mining like Bitcoins do, thus decreasing the amount of CPU power needed, which reduces latency.