Cryptocurrency is a virtual currency that is based on the Internet. It represents the value that is not issued by a government or central banks. Instead, they are backed by their own respective networks and are accepted by people as payment for their goods and services. Digital coins can be stored in a digital wallet or cloud wallet and can be exchanged on a digital currency exchange portal for other currencies, such as the US Dollar.
Compared to their alternative cash or credit payments, cryptocurrency has a number of advantages. While traditional banks charge fees to process monetary transactions, Cryptocurrency can be transferred from person to person, person to business and business to business without banks acting as the middlemen.
Cryptocurrencies are generated by their own networks. Every network has their own unique way of generating and distributing their cryptocurrencies to their users. In most cases, users are rewarded with cryptocurrencies when they help to solve the next block of the cryptologic puzzle. These users are referred to as digital currency miners who solve complex mathematical problems while simultaneously verifying transactions on the cryptocurrency network. Miners invest processing power and electricity to receive coins as a reward from the network.
One of the more established cryptocurrencies is Bitcoin, the first cryptocurrency issued in 2009. Since its launch, the value of Bitcoin has risen dramatically. As the difficulty of mining new Bitcoins increase, the value of Bitcoin has also increased. In 2014, 1 Bitcoin was equivalent to USD $630. Today in 2017, 1 Bitcoin is valued at USD$4380, almost eight times of what it was three years ago.
There are various cryptocurrencies, each with their own little twist on it, but most of them have the same basic traits:
After sending a cryptocurrency through the network, it cannot be retrieved. Moreover, there are no chargebacks for this one-way transaction.
Anyone on the Internet can open a wallet without registering their ID. Depending on which token is being utilized, there are definitely different stages of anonymity.
Entries are broadcast across the network at once and are confirmed in a few minutes.
Cryptocurrency is built to be very secure. Although it is in its early development, they use the latest cryptographic techniques
Controlled supply by the network