CRYPTOCURRENCIES
WHAT IS A CRYPTOCURRENCY?
A cryptocurrency is a type of digital currency which relies on cryptography, usually alongside a proof-of-work scheme, in order to create and manage the currency. Most cryptocurrencies are peer-to-peer and decentralized and are based on the first cryptocurrency, Bitcoin. They are generally designed to have no inflation (once all the currency has been produced), in order to keep scarcity and hence value. However, a few cryptocurrencies, such as PPCoin, do have a small amount of inflation. Cryptocurrencies are also designed to ensure that funds can neither be frozen nor seized. Existing cryptocurrencies are all pseudonymous, though additions such as Zerocoin have been suggested, which would allow for anonymity.
HISTORY OF CRYPTOCURRENCY
The first cryptocurrency was Bitcoin which was created in 2009 by pseudonymous developer Satoshi Nakamoto, and used the cryptographic algorithm SHA-256 as its proof-of-work scheme. Later on, other major cryptocurrencies, such as Namecoin (an attempt at a decentralized DNS), Litecoin (which uses scrypt as a proof-of-work, as well as having faster transaction confirmations) and PPCoin (which uses a proof-of-work/proof-of-stake hybrid, and has inflation of about 1%) were also created. Many other cryptocurrencies have been created, though not all have been successful, especially those which brought very few new innovations. For the first couple years of existence, cryptocurrencies gradually gained attention from the media and public, since 2011, interest has rapidly increased, especially during the rapid price rise of Bitcoin in April 2013.
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A cryptocurrency is a type of digital currency which relies on cryptography, usually alongside a proof-of-work scheme, in order to create and manage the currency. Most cryptocurrencies are peer-to-peer and decentralized and are based on the first cryptocurrency, Bitcoin. They are generally designed to have no inflation (once all the currency has been produced), in order to keep scarcity and hence value. However, a few cryptocurrencies, such as PPCoin, do have a small amount of inflation. Cryptocurrencies are also designed to ensure that funds can neither be frozen nor seized. Existing cryptocurrencies are all pseudonymous, though additions such as Zerocoin have been suggested, which would allow for anonymity.
HISTORY OF CRYPTOCURRENCY
The first cryptocurrency was Bitcoin which was created in 2009 by pseudonymous developer Satoshi Nakamoto, and used the cryptographic algorithm SHA-256 as its proof-of-work scheme. Later on, other major cryptocurrencies, such as Namecoin (an attempt at a decentralized DNS), Litecoin (which uses scrypt as a proof-of-work, as well as having faster transaction confirmations) and PPCoin (which uses a proof-of-work/proof-of-stake hybrid, and has inflation of about 1%) were also created. Many other cryptocurrencies have been created, though not all have been successful, especially those which brought very few new innovations. For the first couple years of existence, cryptocurrencies gradually gained attention from the media and public, since 2011, interest has rapidly increased, especially during the rapid price rise of Bitcoin in April 2013.
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