A Cryptocurrency (or Crypto Currency or crypto for short) is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership.
It typically does not exist in physical form (like paper money) and is typically not issued by a central authority. Cryptocurrencies typically use decentralized control as opposed to centralized digital currency and central banking systems.
When a cryptocurrency is minted or created prior to issuance or issued by a single issuer, it is generally considered centralized. When implement with decentralized control, each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.
A cryptocurrency is a system that meets six conditions:
1. The system done not require a central authority; its state is maintained through distributed consensus.
2. The system keeps an overview of cryptocurrency units and their ownership.
3. The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created. The system defines the circumstances of their origin and how to determine the ownership of these new units.
4. Ownership of cryptocurrency units can be proved exclusively cryptographically.
5. The system allows transactions to be performed in which ownership of the cryptographic units is changed. A transaction statement can only be issued by an entity proving the current ownership of these units.
6. If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs at most one of them.
TOP 5 CRYPTOCURRENCY
First released as open-source software in 2009, is the first decentralized cryptocurrency. Since the release of bitcoin, other cryptocurrencies have been created.
Ethereum is seen more as a medium of exchange than a store of value by cryptocurrency users. Ethereum started a transition in its structure from proof of work to proof of stake, basically a shift aimed at making transactions in it cheaper, faster and less electricity intensive.
XRP or Ripple
XRP is the currency created by Ripple Inc, a US company in 2012. XRP was designed for payments and remittances and operates in a manner similar to SWIFT, the network for moving money between banks.
USD tether or USDT is a cryptocurrency that tries to mirror the US dollar on a 1:1 basis. Tether is issued by Tether Ltd, a company owned by the operator of Bitfinex, a cryptocurrency exchange in 2014.
Litecoin is a Bitcoin spinoff launched by a Google engineer Charlie Lee in 2011 with the idea of speedier transactions than conventional bitcoin. It differs from bitcoin in some of its technical processes.
Written by Arshad. A