What is Cryptocurrency?

Just as other currencies, cryptocurrencies are also medium of exchange. They are specifically designed with the aim to exchange digital info through some processes. These processes are created under the paradigm of cryptography. This upcoming technology helps the users to safeguard their transactions and also to keep a check over the creation of new digi-coins.

The first ever cryptocurrency which came into existence was Bitcoin, which was launched in the year 2009 by an anonymous person named Satoshi Nakamoto. With the passage of time, now there are more than 700 various cryptocurrencies which have their exxistence on Earth. All the cryptocurrencies except Bitcoins are called Altcoins. In very simple words cryptocurrencies are “Digital Currency”.

In the case of Cryptocurrencies government has no control over the process of pricing. As in case with fiat money its the banks and the government that together decide upon the value of currency, but that is not the case with this fully decentralized Crypto based currency.

The production of most of these currencies would decrease with increase in time. The major cause of inflation in market is the printing and availablity of new fiat currency notes in market which is not the case here. For instance it is pre decided with Bitcoin that there would be only 21 million coins that exist in circulation in the entire life span. This was the mind game of Satoshi Nakamoto who has proved that an economy can also run without fiat money.

Amongst more than seven hundred cryptocurrencies that exist there are two protocols on which they are based,

  • Proof-of-work and

  • Proof-of-stake

There is a community of Crypto-miner who maintain all te existing cryptocurrencies worldwide. These crypto-miners belong to the category of commom man and are the ones who possess ASIC machines or computers. They are responsible for validating and processing any transaction.