Cryptocurrency is an asset designed to work as a medium of exchange. It uses strong cryptography to secure verification of assets and also to verify financial transactions. The owners of the cryptocurrency are not identifiable but the transactions that take place are available in the blockchain.
Cryptocurrencies exist outside the existing banking systems, and the transactions take place over the internet. It uses decentralization way of controlling the currency. This way each currency works through distributed ledger technology, typically a blockchain which serves as a public financial transaction database. Cryptocurrency are of various types such as,
1) Bitcoin(BTC) –
Bitcoin was the first cryptocurrency to emerge. It is completely based on the SHA-256 Algorithm. The transactions that take place using bitcoins are irreversible and charge very less processing fees. The smallest augmentation of a Bitcoin is called as Satoshi. It is named after the original whitepaper author Satoshi Nakamoto. Bitcoins in current times is the most trusted form of cryptocurrency. Once the bitcoin blockchain is complete users can circulate the coins that still exists in the community.
2) Litecoin(CTC) –
Litecoin works on Scrypt Encryption Algorithms which is contradicting to SHA-256 that is used by Bitcoin. The quantity of litecoin available for mining and circulations is nine times more than the quantity of Bitcoin. It has a simple cryptographic algorithm which makes the block generation 4x faster. It was used in recent times for a cross chain swap which allowed all its users to swipe currencies directly using smart contracts, without the need for a middle party for an exchange.
3) Ethereum(ETH) –
Ethereum’s platform enables smart contracts and distributes applications to be built and operated in low time. The applications on Ethereum are conducted on its own platform using specific cryptocurrencies tokens called “Ether.” It is used as a means of transportation around the Ethereum system. Ethereum could even be used to create Blockchain applications and new tokens. It has a market capitalization of $4.46 billion and stands second rite after Bitcoin.
4) Zcash –
Zcash is a decentralized and open source of cryptocurrency launched in 2016. It offers privacy and confidential transactions to its traders. It gives the option of shield transaction which allows content to be encrypted using advanced cryptographic procedures or zero-knowledge proof structure called as zk-SNARK developed by its team.
5) Ripple(XRP) –
Ripple is a real-time worldwide settlement network that provides instant, certain and low-cost international payments. It has a currency capitalization of $ 1.6 billion. Unlike bitcoin and altcoin, ripple does not require any form of mining and this form of currency can only be acquired by buying the currency from various exchanges. The plus point about ripple is that it is backed up by many financial institutions and Banks.