Cryptocurrencies have undoubtedly become very popular in the last couple of years. However, many ask themselves the following questions: What exactly are they and where did they come from?
In the literal sense of the word, ‘cryptocurrency’ simply means digital money. The first, most well-known and influential digital currency is considered to be Bitcoin. It was founded back in 2009 by a programmer, or possibly by a group of computer specialists, under the stage name of Satoshi Nakamoto.
Therefore, with the launch of Bitcoin began the use of new age technology called blockchain. This technological system is very similar to the balance sheets used by banks and every digital asset has its own individual blockchain. Its main task is to constantly re-verify the record of every transaction made using the currency, keeping it secure.
Cryptocurrencies make low fee, near-instant worldwide transactions possible, allowing people to have complete control over their assets. Moreover, in the last decade both Bitcoin and fellow cryptocurrency Ethereum became alternatives to fiat money issued by governments.
The key concept of digital assets is that they are made to be secure. Their systems operate with an open source, core software, allowing the above mentioned blockchain to be constantly updated without being manipulated.
Cryptocurrency holdings are not connected to any financial or government institution. Therefore, they are available to the consumer anytime and anywhere in the world, no matter the financial circumstances of the global financial system.
As a result of Bitcoin’s large success, many other cryptocurrencies, known as “altcoins”, launched on the crypto market. The term altcoin quite literally means “alternative coin”, so it refers to all cryptocurrencies other than Bitcoin. An estimate of more than 5,000 altcoins are available on the crypto market, while Ethereum and Ripple are the largest ones. Other cryptocurrencies, making 34% of the total crypto market, are Litecoun, Peercoin, Namecoin, Cardano, to name a few.