Economics

What Is A Cryptocurrency?

Cryptocurrency is a digital asset that is designed to function like an exchange medium using cryptography.

A cryptocurrency is a virtual or digital currency which uses complex algorithms to make it possible to conduct secure digital transactions. The common characteristics in all cryptocurrencies are the use of cryptography for security and their decentralized control system so that there is no single centralized authority to issue the currency. The Bitcoin was the first successful decentralized cryptocurrency and became the inspiration of many other cryptocurrencies used all over the world.

Auroracoin

The Auroracoin is a cryptocurrency used in Iceland as an alternative to the traditional Icelandic krona. The Auroracoin (abbreviated as AUR) was released to the public in 2014 as a result of government restrictions placed on the Icelandic krona with the international movement of the krona being severely restricted. The auroracoin was issued freely to the public in a process known as “airdropping,” conducted in three phases. In its inaugural issue, each claimant received 31.8 auroracoins with each auroracoin being valued at $12.11. The Icelandic government has mixed feelings about the auroracoin with politicians seeing it as way individuals can exploit to evade taxation. However, during phase one of the issuance of the cryptocurrency, the government allowed the developers known as Odinsson to use the national database of citizens to identify claimants of the cryptocurrency.

Bitcoin

The Bitcoin is another form of digital currency which is synonymous with the cryptocurrency. Issued in 2009, the Bitcoin was the first cryptocurrency to be issued for wide-scale transactions. The Bitcoin is abbreviated as BTC or XBT and is made up of subunits known as the Satoshi. The cryptocurrency uses a peer-to-peer system where transactions are conducted directly between users with no intermediary. The Bitcoin was developed by the Satoshi Nakamoto, a group of programmers. The Bitcoin has the largest market capitalization of any cryptocurrency and has an estimated 5.8 million users. Over 100,000 merchants all over the world accept transactions conducted using Bitcoins and include key industry players such as PayPal, Microsoft, Dell and Virgin Galactic among others.

Burstcoin

The Burstcoin is a digital payment system which uses a next-generation blockchain technology. The Burstcoin is abbreviated as BURST and is made up of subunits known as Burst. The Burstcoin was introduced in 2014 and are mined using a simple proof-of-capacity algorithm which makes the Burstcoin among the first cryptocurrencies to use the proof-of-capacity platform and is among the most energy efficient cryptocurrencies. The currency is issued using a decentralized system. In 2016, the currency introduced an Android version which allowed users to mine coins on Android devices. The Android wallet was created to supplement the existing PC Burst Wallet.

Coinye

The Coinye is a defunct digital currency issued internationally between January 2014 and May 2014. The crypt-based currency was developed by David P. McEnery Jr. The Coinye was originally known as Coinye West, named after American rapper, Kanye West and used the rapper as its mascot. The cryptocurrency’s logo also featured a half-fish, half-human figure whose face closely resembled Kanye West. The move prompted the rapper to file a lawsuit against the developers for trademark infringement. After being engaged in the legal tussle, the developers of the Coinye abandoned the project, and Coinye is no longer active.

Dash

Dash (abbreviated as DASH) is a form of digital payment developed by Evan Duffield and Kyle Hagan who released it in January 2014. Originally known as XCoin and later as Darkcoin, the cryptocurrency was renamed to Dash on March 25th, 2015 which is a combination of the terms “Digital” and “Cash.” Dash uses an open source peer-to-peer platform and is among the few cryptocurrencies to have the capacity to conduct instant transactions, a feat made possible through its InstantSend product. Dash was the fifth most valuable cryptocurrency as of July 2017 with a market capitalization exceeding $1.4 billion and recorded a daily trade volume of $100 million. The cryptocurrency uses a two-tier architectural system made of miners and masternodes.

Dogecoin

Dogecoin is a cryptocurrency which started as an internet joke currency but grew to become one of the highest valued cryptocurrencies in the world. The Dogecoin was developed by Jackson Palmer and Billy Markus who introduced it on December 8th, 2013. The Dogecoin’s logo features the likeness of the dog from the popular “Doge” meme. Unlike most cryptocurrencies, the Dogecoin has a fast initial coin production schedule with the 100 billionth Dogecoin being mined on June 30th, 2015 and 5.256 billion coins every year after that. In December 2015 Dogecoin experienced its first theft attempt with millions of coins being stolen through hacking of its Dogewallet platform. The value of Dogecoin grew tremendously reaching a market capitalization of $13.5 billion on January 25th, 2015 and its trading volume even eclipsed that of all other cryptocurrencies combined (including Bitcoin) in January 2014.

Titcoin

Titcoin is an award-winning cryptocurrency used in the adult entertainment industry. Titcoin was developed by Richard Allen, Edward Mansfield, and another anonymous developer who released the cryptocurrency on June 21st, 2014 making Titcoin the earliest adult cryptocurrency still in existence. The developers came up with the idea of the adult-based cryptocurrency to provide anonymity to consumers of adult entertainment. The currency uses the SHA-256d algorithm with a block time of 60 seconds. Titcoin has a rather low market capitalization of about $100,000 with a total of 69 million coins in existence.

Potcoin

Potcoin is a cryptocurrency used in online transactions involving legal cannabis. Potcoin was introduced on January 21st, 2014 by three developers going under the nicknames; Mr. Jones, Hasoshi, and Smokemon 514 (later revealed as Nick Iversen and Joel Yaffe) and uses an open-source software which runs under a peer-to-peer platform. Soon after launch, the developers also released Cryptorush, a cryptocurrency exchange that allowed for the trading between PotCoin and Bitcoin. PotCoin uses a proof-of-stake system and is based on a block chain public ledger. PotCoin has been accepted as a mode of payment by many cannabis suppliers in the United States with Chronic Star Medical becoming the first store to accept PotCoin on February 17th, 2014.

Criticism Of Cryptocurrencies

The most widespread concern people have about cryptocurrencies is the safety and legality of the virtual currencies. Almost all the major cryptocurrencies have been targeted by hackers which led to the theft of millions of digital coins. Very few financial institutions around the world allow cryptocurrency transactions. Due to the factor of anonymity, cryptocurrencies have become the preferred mode of payment for illegal transactions conducted through the Darknet markets.

Types of Cryptocurrency

ReleaseCurrencySymbol
2014AuroracoinAUR
2009BitcoinBTC,XBT
2014BlackCoinBC
2014BurstcoinBURST
2014DashDASH
2013DogecoinDOGE, XDG
2014DigitalNoteXDN
2013EmercoinEMC
2015EthereumETH
2015Ethereum ClassicETC
2013GridcoinGRC
2015IOTAIOT,MIOTA
2011LitecoinLTC
2014MazaCoinMZC
2014MoneroXMR
2011NamecoinNMC
2014NEMXEM
2014NxtNXT
2013OmniMSC
2012PeercoinPPC
2014PotCoinPOT
2013PrimecoinXPM
2013RippleXRP
2015SixElevenSIL
2014Synereo AMPAMP
2014TitcoinTIT
2017UbiqUBQ
2014VertcoinVTC
2016ZcashZEC

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