Bitcoin was the first cryptocurrency and it has established itself as the most widely used digital currency today, but it’s far from the only one. Other digital coins are rising in popularity, including Ethereum, Ripple and Litecoin, just to name a few of the most well-known cryptocurrencies. The boom in crypto coins – which exist only digitally – has helped reinvigorate the concept of money, but it’s also had other effects on technology and society that are altering business practices and changing how we live and do business.
1) The rise of cryptocurrency
Cryptocurrencies have been on a meteoric rise and show no signs of slowing down. They are radically transforming the way we think about money, and have the potential to revolutionize our world. To help you understand what it is, how it works, and what it means for society, we’ve broken down cryptocurrency into easy-to-understand pieces.
2) How cryptocurrency is used
Cryptocurrencies are changing the way we conduct business and store our personal information. With Bitcoin, you don’t need a bank account or debit card to send or receive money. You can also use cryptocurrencies to buy goods and services online without divulging any personal information.
3) What are the benefits of cryptocurrency?
In addition to circumventing issues with cash, cryptocurrency has a number of other benefits. For example, it can be more difficult for law enforcement to track bitcoin transactions than traditional bank transactions. It also provides an option for people in countries that experience hyperinflation or where the government limits access to foreign currencies. Finally, it can provide a way for people who lack identification or proof of address to provide access to financial services and participate in commerce online.
4) What are the risks of cryptocurrency?
Cryptocurrencies like Bitcoin, Ethereum and Litecoin are digital currencies not regulated by any government. This lack of oversight has led to a number of problems, including everything from fraud to hacking. In February 2018, the Japanese-based cryptocurrency exchange Coincheck suffered a $500 million hack. The theft was so bad that it prompted Japanese regulators to issue an emergency order shutting down all crypto exchanges in the country and limiting withdrawals.
5) How does cryptocurrency work?
Crypto coins are digital currencies that use cryptography to secure transactions and control the creation of new coins. Unlike traditional currency, they don’t have a physical form and are decentralized, meaning no government or bank controls them. As the popularity of Bitcoin has grown, so has its market cap. Today, there are more than 1,600 crypto coins in circulation with a combined market cap over $200 billion.
6) What is blockchain technology?
Blockchain technology is an irrefutable digital ledger of transactions that can be programmed to record virtually anything and cannot be altered once it has been stored. In other words, the blockchain can be used to track the movement of goods or money without the need for a centralized authority such as a bank or government.
7) What are smart contracts?
Smart contracts are a new and exciting technology that uses the power of blockchain to create self-executing agreements. Essentially, smart contracts are an agreement between two parties that is verified by a computer and enforced digitally. As these contracts can be created without any third party interference, they also have the potential to revolutionize many industries such as banking, real estate, law enforcement, etc.
8) What are Initial Coin Offerings (ICOs)?
An Initial Coin Offering, or ICO, is a crowdfunding mechanism that trades future cryptocoins in exchange for cryptocurrencies of immediate, liquid value. This means that you can invest money today and receive coins in the near future. These coins are usually based on the Ethereum platform and are called ERC20 tokens.
9) What is mining?
Mining is the process by which transactions are verified and added to the public ledger, known as the blockchain. It’s also the means through which new bitcoins are released. Anyone with access to the internet and suitable hardware can participate in mining.
10) What are altcoins?
Altcoins, or alternate coins, are cryptocurrencies created with the same blockchain technology as Bitcoin. The idea behind altcoins is to offer an alternative cryptocurrency. The first and most well-known altcoin is Litecoin (LTC). Other popular altcoins include Ethereum (ETH), Bitcoin Cash (BCH), Ripple (XRP) and Monero (XMR).