A cryptocurrency is a form of digital money or assets that is secure by cryptography.
Bitcoin is accepted as the first cryptocurrency which functions in decentralised manner, meaning that a central “clearing house” in traditional banking or trading terms is not required to verify that an account holder owns an asset.
A good way of understanding cryptocurrency is that they are bearer bonds.
Bearer bonds – wikipeadia’s definition is this
A bearer bond is a bond or debt security issued by a business entity such as a corporation, or a government. As a bearer instrument, it differs from the more common types of investment securities in that it is unregistered – no records are kept of the owner, or the transactions involving ownership. Whoever physically holds the paper on which the bond is issued owns the instrument. This is useful for investors who wish to retain anonymity. Recovery of the value of a bearer bond in the event of its loss, theft, or destruction is usually impossible. Some relief is possible in the case of United States public debt.Why are there so many cryptocurrencies?
Why are there so many cryptocurrencies?
There are not only many derivatives of the original bitcoin protocol but different ways securing the blockchains. For example Proof of Work, Proof of Stake, Delegated Proof of Stake, Directed Acrylic Graph and perhaps others.
These difference cryptocurrencies all exhibit different properties, such as:
- Faster confirmation times – when can spend or move the asset when someone has received it
- Many different fees to pay for the movement of the cryptocurrency to another account or ledger
- Whilst some cryptocurrency like Bitcoin is pseudo anonymous, some cryptocurrencies strive to provide anonymity to the holders of the cryptocurrency
- Many cryptocurrency allow the creating of multisignature wallets, like joint accounts at bank, come cryptocurrencies even allow you to add new signatories at a later date but must cannot
- Allow people to create their own money, yes their personal digital cryptocurrency, this could be “hours work”, meal at restaurant or even shares in a the new company
- Some wallets that hold their cryptocurrency also have applications which are available to the wallet holder. Such as “secure chat” and the ability to exchange user create assets with other wallet holders