Cryptocurrency is basically money that only exists digitally and offers an alternative form of payment to cash, credit cards, and cheques. The technology behind cryptocurrency uses cryptography and blockchain technology, which makes transactions secure.
Cryptocurrencies are independent of central banks and are decentralized. These transactions are verified and recorded by a public distribution ledger called a blockchain. The blockchain manages cryptocurrency transactions and the issuing that is carried out collectively by the network. The currencies are held in a virtual field of mathematics of changing balances from private or public “keys” which are synonymous with account numbers.
Major banks and other business and financial institutions are investing in blockchain technology that runs cryptocurrency, which in my opinion will result in inevitable price rises.
Many innovative early-stage start-up companies use cryptocurrency via what are termed ‘Initial Coin Offerings’ (ICO’s). This helps the company fund their project. So purchasing cryptocurrency related to these start-up businesses is similar to owning shares in the company.
The current total market cap for all cryptocurrencies is around $165.9 billion USD. There are around 2,130 various cryptocurrencies. Cryptocurrency adoption could see the biggest redistribution of wealth the world has ever known.
Based historically on what Bitcoin did, in April 2011 if there was $1 USD invested in Bitcoin, in December 2017 that $1 USD would of increased to a value of $20,000 USD.
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This list also serves to illustrate the diverse use of this new asset class.
Bitcoin was invented by Satoshi Nakamoto in October 2009. Satoshi Nakamoto may be the name of an individual or a collective of programmers. No one actually knows. Bitcoin became the first feasible cryptocurrency with transactions taking place between users directly, without an intermediary. Bitcoin can be thought of as digital gold/electronic cash. Bitcoin allows fast peer-to-peer transactions worldwide with low processing fees. The purchase of other cryptocurrencies (altcoins; alternative cryptocurrencies launched after the success of Bitcoin) often requires ownership of some Bitcoin. Bitcoin can be traded on exchanges to purchase one or more of the 2,130 plus altcoins, so for this purpose alone Bitcoin in my opinion will always have value, as cryptocurrency is here to stay. There are currently around 17 million bitcoins in circulation. The total supply ever to be created is capped at 21 million bitcoins, which is why it is sometimes referred to as ‘digital gold’, as there is only a finite amount of Bitcoin available. The current market cap of Bitcoin is around 90 billion USD.
Ethereum was created in July 2014. Ethereum is the blockchain platform on which the currency known as Ether is exchanged. Ethereum is a second-generation blockchain network that enables developers to write smart contracts. A group of smart contracts working together form the blueprint for a decentralized application or DApp. In short Ethereum is an electronic currency that actually does stuff! Smart contracts let you exchange not just money but property, stock, and many other commodities without having to go through a lawyer, notary or other service provider. It cuts out the (expensive) middleman entirely.
Ripple was created in 2012. Ripple is a payments protocol designed to improve financial transactions between banks by making them faster (transaction speed of only 4 seconds!), cheaper and more reliable. Ripple has been adopted by banks and payment networks as a settlement infrastructure technology. Ripple Labs has managed to become the leading blockchain technology provider in payment/settlement solutions for financial services companies. As a supplement to their network Ripple Labs created a cryptocurrency called XRP, which can be used as an alternative to fiat currency for value transfer. The most notable difference between Ripple and other blockchains is Ripple’s centralisation. A large group of individual blockchain investors hold a grudge against the company. The major problem the blockchain community seems to have with Ripple is the fact that Ripple is completely centralized and that they’re aiming to boost efficiency for the global financial system. This is contrary to the beliefs of the die-hard blockchain community that wants to circumvent this (in their opinion) untrustworthy and irresponsible industry by using cryptocurrencies and blockchain.
Litecoin was created in 2011 by former Google engineer Charlie Lee. The motivation behind its creation was to improve upon the Bitcoin protocol. Lee envisaged creating a currency that would be complementary to Bitcoin and operate as “digital silver” to Bitcoins status as a digital store of value similar to gold. Litecoin can handle a higher volume of transactions when compared to Bitcoin. Litecoin is much cheaper than Bitcoin and has a significantly higher circulating supply. Where Bitcoin will eventually have 21 million coins in circulation, Litecoin will have 84 million coins in circulation. Bitcoins algorithm allows for one transaction to be added to the public ledger every 10 minutes, Litecoin has a faster rate of confirmation at one per 2.5 minutes.
Golem (GNT) cryptocurrency is the world’s first open-sourced and decentralized super-computer. A user on Golem’s platform can do energy-intensive scientific calculations, run a long code, or do Computer Generated Imagery (CGI), or other computer tasks that require a lot of computer power. Golem supercomputers will run when users pay GNT tokens.
Factom (FCT) intends to be the immutable universal record keeper of the world. Once something is recorded onto the Factom platform it can’t be changed, and it becomes forever immutable as it becomes anchored to Bitcoin’s blockchain. This acts like a trustable record against which any digital artifact (documents, videos, or audio) can be verified, and original records are kept safe.
Storj (STORJ), Siacoin (SC), and Filecoin (FIL) utilise the massive amounts of data storage that sits unused around the world. Blockchain technology allows for a cheaper, faster, and more secure alternative to existing corporate cloud storage platforms, plus providers can earn revenue.
Cryptocurrencies are being utilised in many industries including; Healthcare (MEDX, STEM CELL COIN, Dentacoin, MediShares…), Energy (Power Ledger, Solar Coin, Energycoin…), Education (Insight Chain, ODEM, Nectar, EduCoin…), Internet of Things (IOT) (IOTA, Waltonchain, MyBit…), Media (Howdoo, SIX, SnapCoin…), Debit Card (TenX, Bankera, Cryptopay…), Gambling (Casino Coin, Wager, Peerplays…), as well as advertising, artificial intelligence, art, business services, communication, entertainment, financial services, manufacturing, prediction, privacy, real estate, storage, transportation, travel, virtual reality.
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