A 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. Crypto-currencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies.

The idea of a mathematically secure chain of blocks was first mentioned in 1991, first conceptualized as digital currency in 1998 as “Bit Gold”. Bitcoin became the first decentralized digital coin when it was created in 2008. It then went public in 2009.

Bitcoin uses Peer-to-Peer transactions, with no middleman or financial institution involved. Records of each transaction are cryptographically verified by other nodes on the Bitcoin network, then those transactions combined into a ‘block’ and added to Bitcoin’s ledger, otherwise knows as the blockchain.

The blockchain holds details of every single transaction on the Bitcoin network, and as the blockchain is simultaneously held on multiple nodes throughout the blockchain network, it is unable to be changed, disrupted, censored, or hacked. Nodes on the network, commonly known as ‘Miners’ collect a small fee from each Bitcoin transaction, as an incentive for keeping the network online.

Since Bitcoin was released, there have been hundreds of new cryptocurrencies created, which all serve their own individual purpose. Ethereum is arguably the most successful platform after Bitcoin. Ethereum enables users to attach ‘Smart Contracts’ to their transactions, which execute without any possibility of downtime, censorship, fraud, or third-party interference.

Most other “Alt-coins” have piggybacked off the design of the Bitcoin or Ethereum code, and each have made their own improvements or features added to those codebases. Some may be more privacy orientated, others more focused on the speed of transactions, and more commonly these days, a lot of coins are being launched to fund new projects in place of seeking venture capital.

As of January 2015, there were over 500 different types of cryptocurrencies – or altcoins – for trade in online markets. However, only 10 of them had market capitalizations over $10 million. By December 2017, the total market cap reached $600 billion (a multiple of 10 in only two months).

Year 2017 has been proved a growth year for crypto currency and there is a lot of potential for growth and stabilization of bitcoin and other alt-coins. Though, the current scenario may indicate that who whole crypto currency saga appears to be a bubble, bit coin has already proved its worth and after some corrections and consolidation, the crypto currency is here to stay for some time.

 

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