Cryptocurrency also known as virtual currency is a decentralised digital currency that can be transferred between peers without the need for an intermediary like bank. Cryptocurrency architecture allows transactions to be confirmed by the participating entities through a process known as mining. Once transactions are confirmed, it becomes automatically added on a publicly available ledger known as the blockchain. In the simplest form, cryptocurrency is like the everyday fiat money but on a digital platform. It is sometimes referred to as. Cryptocurrency is just but one use case of an actively evolving technology known as the Blockchain Technology.
Bitcoin is the most prominent cryptocurrency and the first to be widely accepted and used. Bitcoin’s whitepaper which set the stage for the development of cryptocurrency was first published in 2009 by a person or group of persons that goes by a pseudo name – Satoshi Nakamoto. The main purpose was for Bitcoin to become a peer to peer electronic cash system that will enable peers to send and receive money cheaply and instantly from anywhere in the world without the need for an intermediary or a gatekeeper.
There are currently over 1500 cryptocurrencies available on the internet. These cryptocurrencies can easily be traded for each other on platforms known as Cryptocurrency exchanges similar to stock, forex and other traditional markets.
There have been an exponential growth of this new means of value exchange from zero market capitalisation at inception in 2009 to over 700 billion USD as at January, 2018. This meteoric growth has attracted significant interests from diverse sources bringing cryptocurrency on the center stage during the 2018 world economic forum in Davos.
Each of the many cryptocurrencies available in the market is unique in that they try to focus on specific application area of the wider blockchain technology, but similar because they all use blockchain’s decentralized network architecture.
Here is a list of top five cryptocurrencies with notes on each of their purpose.
BITCOIN– created in 2009 as a peer to peer electronic cash system that allows
exchange of values on the internet without the need for an intermediary
ETHEREUM– Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference.
These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property.
This enables developers to create markets, store registries of debts or promises, move funds in accordance with instructions given long in the past (like a will or a futures contract) and many other things that have not been invented yet, all without a middleman or counterparty risk.
RIPPLE: Ripple connects banks, payment providers, digital asset exchanges and corporates via RippleNet to provide one frictionless experience to send money globally. The world’s only enterprise blockchain solution for global payments.
BITCOIN CASH:This cryptocurrency is a fork of Bitcoin. According to the project website “Bitcoin Cash brings sound money to the world, fulfilling the original promise of Bitcoin as “Peer-to-Peer Electronic Cash”. Merchants and users are empowered with low fees and reliable confirmations.”
CARDONA: Cardano is a cryptographic currency designed and developed by IOHK in conjunction with the University of Edinburgh, the University of Athens and the University of Connecticut. Cardano is based on the Haskell implementation of the white paper “Ouroboros: A Provably Secure Proof of Stake Blockchain Protocol” by Aggelos Kiayias, Alexander Russell, Bernardo David and Roman Oliynykov. The national research and education network of Greece plans the first Cardano pilot project by verifying student diplomas via Cardano’s blockchain.
Israel Martins is a cryptocurrency researcher and trader since 2016, passionate about blockchain and other emerging technologies.