A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets.
Bitcoin is a cryptocurrency and worldwide payment system. It is the first decentralized digital currency, as the system works without a central bank or single administrator.
Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren't printed, like dollars or euros – they're produced by people by using some complex algorithm which is called Mining Bitcoin.
Dogecoin is a cryptocurrency featuring a likeness of the Shiba Inu dog from the "Doge" Internet meme as its logo. Introduced as a "joke currency" on 6 December 2013, Dogecoin quickly developed its own online community and reached a capitalization of US$60 million in January 2014.
The most popular cryptocurrency is currently Bitcoin, however, there are several other existing cryptocurrencies in circulation and this is growing. These alternative cryptocurrencies are referred to as Altcoin. Over a thousand are available over the internet but the main competitors in this market are Bitcoin, Ethereum, Ripple, Bitcoin Cash, Litecoin, and EOS.
Cryptocurrency wallets do not require a person to provide personal information nor is this validated by any governing authority. This means that one person can create an indefinite amount of wallets. Because of this, no accurate figure can be given to estimate the number of users. As of 2018, almost 22 million bitcoin wallets have been created but only around 13-26% of these users are active. Coinbase, one of the leading exchange sites, has over 13 million users.
After getting a firm understanding on what cryptocurrency is and how it is traded, anyone can join the market. The easiest way to do this would be to select a crytptocurrency to invest in, create an online wallet to store your digital money, and use an exchange site to buy, sell and trade your coins. Here's a more detailed guide on how to get started.
Exchange sites offer cash withdrawal by sending money to Paypal or doing a bank transfer. Cashing out your bitcoins can be done by selling your bitcoins at the current market price and directing the exchange site to transfer these funds to you. Another way to do this would involve peer-to-peer selling, where you would do real world currency exchange and do an online bitcoin transfer.
Bitcoins or other forms of cryptocurrency can be stored in Wallets. These wallets do not actually hold your bitcoins but instead store the private key that provides access to the bitcoin address where the digital currency is stored. There are different forms of wallets: Electronic Wallets, Software Wallets, Online Wallets, Mobile Wallets, Hardware Wallets, Paper Wallets.
The first cryptocurrency created was Bitcoin which was developed by an anoynymous individual or group of individuals under the name Satoshi Nakamoto. This was developed in 2009.
Bitcoin owners cannot be identified since wallets do not require personal data. However, each wallet is owned by an identity on the internet under a specific pseudonym. By linking this pseudonym to a real world identity, the people involved in these transactions can be identified. Thus, it is more appropriate to refer to bitcoin as pseudonymous instead.
The value of any form of cryptocurrency is highly dependent on the market. Market value relies on the principles of supply and demand much like traditional stock markets. The more people are willing to pay for it, the higher the value.
Bitoin mining is done by adding a block to the growing blockchain. This involves verifying a bitcoin transaction that has occurred through a hash function (SHA-256). People who mine bitcoins are called miners and are rewarded bitcoins for every successful block added.
The legality on the ue of bitcoin and other forms of cryptocurrency varies from country to country or, in some countries like the USA, state to state. Some areas allow the buying, selling and trading of digital currency while there are others who have banned any use. There are also some areas that have no laws regarding cryptocurrency.
Cryptocurrency aims to provide a universal currency that is not controlled by a central governing authority. This decentralization makes transaction records immutable since a consensus is required to maintain them. Transactions through cryptocurrency are not only faster but also involve lower transfer costs.
This is a decentralized ledger that contains the history of all transactions on bitcoins. Made up of blocks with this data, the blockchain is a distributed public record of all existing transactions made for a type of cryptocurrency.