Getting Familiar With Cryptocurrencies

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Cryptocurrency has always been one of the most controversial technologies we have today. To some, the controversy is primarily fueled by the inability of governments to control the supply and demand of digital assets. Meanwhile, others believe that the skepticism associated with cryptocurrency is as a result of ignorance.

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In any case, one thing is certain; cryptocurrency will continue to its steady rise to mainstream status. Many investors and traders have recognized the opportunities embedded in crypto. This has resulted in the exponential growth of the crypto market.

However, there are still lots of misconceptions surrounding the concept of cryptocurrency, and individuals and firms that are looking to take advantage of the volatility of the crypto market, as well as the innovative power of cryptocurrencies, are expected to be well versed in the nitty-gritty of the subject matter.

With this in mind, this article will introduce you to the world of cryptocurrency and the various forms it has taken. Firstly, what is cryptocurrency?

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Bitcoin Alternatives What The Crypto

Cryptocurrencies and digital assets

In simple terms, cryptocurrency is the virtual form of money. As a result, we often refer to it as virtual money or digital asset. The remarkable features of cryptocurrency -perfected by Satoshi Nakamoto in 2009- allow us to perform instant, secure, cheap, and anonymous transactions.

All these amazing functionalities are the result of the cryptocurrency’s underlying technology, blockchain, which permits decentralization and tamper-resistant ledgers.

Types Of Cryptocurrencies

There are three types of cryptocurrency or, better yet, cryptocurrency currently takes these three forms.

Bitcoin

Bitcoin is the first cryptocurrency ever created, and it has remained the main focal point of the crypto market. In fact, many people still solely use the failures and triumphs of Bitcoin to judge the progress made in the crypto world.

If we are to consider that there are over 2,000 of other cryptocurrencies, we can then conclude that this assessment tool seems outdated. However, let’s not forget that many of these cryptocurrencies are imitations or upgrades of Bitcoin.

The Bitcoin network thrives as a result of a consensus structure called the proof-of-work mechanism. It promotes decentralization and maintains the smooth running of the system. Also, Bitcoin is mined via a rigorous process which involves the utilization of computer power to solve mathematical problems.

Altcoins

Altcoins are alternatives to Bitcoin, and they are basically upgrades or tweaked imitations of Bitcoin. There are currently over 1,000 altcoins and some have made a mark in our world by introducing us to breathtaking features.

For example, the crypto community popularly regards Litecoin as the younger brother to Bitcoin. Indeed, this crypto is based on the Bitcoin protocol. However, Litecoin’s impressive functionalities and upgrades are some of the reasons it is still relevant today.

Other major altcoins have one or more features or use case that have made them some of the most important additions to the ever-growing list of cryptocurrencies.

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Tokens

Tokens are unique as they do not normally operate as cryptocurrencies. Instead, they are utilized in decentralized apps (dapps). Therefore, users access rewards, make in-app purchases, access premium features and obtain as well the right to vote. Additionally, they qualify for discounts by owning and using the various native tokens of dapps.


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Conclusion

The crypto space is growing at an unprecedented pace. The best way to stay ahead of the pack is to get familiar with the various projects and cryptocurrencies that are popping up. However, understanding the various forms of cryptocurrency is the fastest way to unearth the gems.  

AICPA, BitcoinPlay

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