A cryptocurrency is essentially a digital currency that is validated by the principles of cryptography. Cryptocurrencies have been around for a while but have lately taken off and are often said to be ‘the currency of the future’. There are already over 3000 cryptocurrencies in use!
By far the most popular and most used cryptocurrency worldwide is Bitcoin, which was created in 2008 and it is making quite a name for itself. People have been flogging to this decentralised monetary system as it allows senders and receivers to keep their identity anonymous, there are no transaction fees and it does not go through banks or governments.
Although Bitcoin is the largest and most well-known name in the cryptocurrency game, there are many other similar projects. One of the biggest cryptocurrencies under Bitcoin is Litecoin. Litecoin is very similar to Bitcoin in that it is also fully decentralised, and both have mathematical algorithms in place as a measure of security. The founders of Litecoin believe that Litecoin can handle a far bigger capacity than Bitcoin in the future as it works in scripts.
Another up and coming cryptocurrency is Ether, the cryptocurrency for Ethereum, which was only launched in 2015 and also very similar in principle to Litecoin and Bitcoin. Although still a fresh face in the industry, Ether is doing remarkably well, has loads of uses and practical applications and we should definitely see more of it in the future.
Monero is another hot name on the list and almost puts Bitcoin to shame in terms of their privacy and anonymity. Monero transactions are absolutely impossible to trace back to individuals. It uses ring signature technology, allowing buyers and receivers to remain completely anonymous. Quite handy when you are buying things you shouldn’t be.
Ripple differs from the other names in that it is more similar to a speedy currency exchange than any of the other above mentioned cryptocurrencies. The Ripple system has recently been implemented in certain banks to cut down on transaction fees and speed up processing times.
Although all cryptocurrencies are slightly different, they all have one thing in common; they are not real money, rather digital commodities. It is also important to remember that these digital coins can fluctuate in value quite rapidly and even though they are growing in popularity, are not yet accepted by all industries.