What is Cryptocurrency?
Cryptocurrency refers to the new form of digital currency that allows for the exchange of digital information using cryptographical principals. The first form of cryptocurrency, bitcoin was created in 2009. There are other newer forms of cryptocurrency such as altcoins
An advantage that cryptocurrency has over other forms of currency is that it is the fully decentralized. This means it is not controlled or influenced by any government or third-party.
Satoshi Nakamoto, the alias behind bitcoin creation puts in place measures to curb over circulation. This limits the bitcoins to only 21 million coins in circulation and creates market cap on them.
The maintenance of the cryptocurrency is handled by a section of the general public who have their computers or even ASIC miner machines set up in transaction validations and processing to solve the network difficulty.
The History of Cryptocurrency
Bitcoin becomes the first form of cryptocurrency to emerge in 2009. This is attributed to a developer going by the name Satoshi Nakamoto. Bitcoin is believed to run using SHA-256, a group of cryptographical hash functions.
Other forms of cryptocurrency came about with the name of "Namecoin", which was the first altcoin was created in April 2011 with the purpose of decentralizing DNS. The emergence of Litecoin in October 2011 saw the general public be able to mine litecoins without specific mining hardware due to its use of scrypt rather than SHA-256. Ripple coin came about in 2011 as a payment system in banking sector with cryptocurrencies.
|Name||Market Cap||Price||Volume||Circulating Supply||Change (24hrs)|
|Bitcoin Cash||$19,327,552,949||$1,140.33||$596,043,000||16,949,088 BCH||-8.78%|
SHA-256 and Scrypt
SHA-256 requires a lot of memory hence favoring the more GPU based machines while scypt requires more energy.
Cryptocurrencies & Capitalization of the Market
The most valuable coin is the NEM stake although Bitcoin leads in market capitalization, volume, and acceptability. Litecoin trails behind Bitcoin with Ripplecoin. Another familiar and rising cryptocurrency is Dogecoin.
This is the rating in which the mining power is rated and is put in terms of hashes per second such as 1kH/s is 1000 hashes per second while 1GH/s is a billion hashes per second.
Security of Cryptocurrency
This involves two parts. First, one being done by miners in finding hash set intersections and the other is a “51% attack” in which a miner with more than 51% of mining power can seize the blockchain ledger
Legal Affairs of Cryptocurrency & taxes
Taxation Cryptocurrencies face major setbacks with countries such as China banning its use. Other countries despite claiming legality have still limited its use. Examples are Russia which has illegalized purchase of goods with any other currency apart from rubles. The U.S. has subjected bitcoin to capital gains tax and also issued guidelines to miners through the Financial Crimes Enforcement Network(FinCEN) warning that they are liable for MTB classification.
Services of the Cryptocurrency
Information about cryptocurrency is easily attainable with services such as CoinMarketcap and CryptoCoinCharts which can be used to gain more knowledge on the market price, volume and market price of the cryptocurrencies. Joining online communities such as on Reddit make a great way of staying aware of the trends and information about the cryptocurrencies. Other services like Liteshack on request can provide hash rates to anyone. CoinWarz is also an important website especially for miners as it helps determine the profitability of different coins and their current characteristics such as rates in the market.