what is cryptocurrency

What Is Cryptocurrency?

Bitcoin is not the first crypto-currency to appear, but pre-Bitcoin experiments all ended in failure. These include DigiCash, CyperCash and E-Gold.

Cryptocurrency was made popular thanks to Bitcoin and its creator: Satoshi Nakamoto. Nowadays there are several thousands of them, but be careful 99% have no real use and will be quickly forgotten. They also have various other names such as virtual currencies, crypto-active, electronic currencies or digital currencies. Ethereum with its ETH symbol is the second best-known crypto. Each cryptocurrency has its own symbol (ticker in English), Bitcoin’s symbol is BTC.

What Is A Cryptocurrency?

Assets that are exchanged peer-to-peer (P2P) without a trusted third party such as banks. They do not have a physical form such as coins or banknotes, they are not regulated by a central body and have not been indexed to the dollar or gold for instance.

Electronic currencies use blockchain technology to pass the ownership of the cryptos between their different holders. Therefore, these cryptocurrencies are simply a sequence of numbers whose ownership is handed over from one person to another. Thanks to cryptos and blockchain, you can now also transfer value over the Internet!

The French government says that crypto currencies do not qualify as currencies since they are too volatile, do not need to be accepted by merchants and are not regarded as a store of value. One thing is certain, this might very well change in the near future.

Cryptocurrencies have experienced an incredible boom in 2017 and 2018 with an incredible demand for fundraising or ICO. Fundraising in crypto enables anyone, from anywhere in the globe, at any time, to invest in a project.

Presently, the trends of fundraising in crypto-currency has clearly diminished, however the market capitalization of the latter, and especially of the BTC, continues to increase. Over $460 billion for Bitcoin on December 26, 2020.

More and more interest is being shown by the financial institutions through numerous investments from specialized hedge funds and companies.

Development and Evolution

A number of developers, known or anonymous, are responsible for the realization and evolution of these digital assets. These developers choose the properties of these assets: the number of circulating tokens or coins, the transaction speed, the reliability (security) of the network… In some special cases, it is sometimes possible to modify the rules. Regardless of whether they are minimal or significant, these modifications lead to the establishment of a new crypto. This is how Bitcoin split and gave birth to Bitcoin Cash on August 1st, 2017.

The new crypto assets are generated by a mining process, with people agreeing to lend computing power to safeguard the crypto cash and are compensated with a monetary reward. More information about which crypto-currency to mine can be found on the internet and through blogs like ours.

In a nutshell

For the most part, the main objective of most of these new crypto-currencies is to fix the issues of the predecessors. For instance, Litecoin is specifically designed to make money transactions faster than with Bitcoin. Ethereum, which focuses on the development of intelligent contracts, or decentralized applications… Or a whole bunch of crypto-currencies aiming to increase the volume of transactions per second on the blockchain. Some other crypto like Ripple, Monero or, the French one, Tezos can be mentioned.

Most cryptomoney systems use blockchain technologies even if other technologies can be used.

Should you be acquiring crypto-currencies, whether for investment or trading, we recommend that you research them thoroughly beforehand.

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