Although possibly the best known, Bitcoin is no longer the only digital currency. In the heat of this cryptocurrency, more than 60 new digital currencies have emerged that represent the creation of a parallel currency market.
Although possibly the best known, Bitcoin is no longer the only digital currency. In the heat of this cryptocurrency, more than 60 new digital currencies have emerged that represent the creation of a parallel currency market. In this article, I will explain exactly what a cryptocurrency is, which is best known, and how much the new exchange market has developed.
Ah, but what do you still need to learn about cryptocurrency?
For those who do not know yet, cryptocurrency is a digital means of payment or exchange. The best-known of the cryptocurrencies is Bitcoin, created in 2009, but it is by no means the only one right now, as we will see later. This type of currency’s objective is to incorporate principles of cryptography to implement an economy based on decentralization, distribution, and information security.
Digital currencies, compared to physical money, present a notable difference: no individual or group can accelerate, hinder or abuse the production of this type of money. Instead, a fixed quantity is produced collectively at a rate that is bounded by a previously defined value, and that is known.
Though most are similar and derived from the first protocol implemented, Bitcoin, dozens of specifications for cryptocurrencies have been created. In cryptocurrency systems, the trading book’s security, integrity, and balance are ensured through a swarm of “miners” dedicated to actively protecting the network by maintaining a tremendous hash-rate difficulty in exchange for receiving small random payouts. In this way, if someone wanted to cause deviations in the value of a cryptocurrency, they could do it. Still, the cost can be very high since, to achieve it, they would need to have a computing capacity superior to that of all the miners together to have a minimum possibility of achieving it. For example, breaking the security of Bitcoin would require a technology company larger than Google.
Most cryptocurrencies are designed to gradually introduce new currency units, limiting the total amount of digital money in circulation. This is done, on the one hand, to mimic the scarcity (and value) of precious metals and, on the other, to avoid hyperinflation. Consequently, cryptocurrencies tend to experience hyperinflation as they grow in popularity and the amount of currency in circulation approaches this limit.
READ MORE: LocalBitcoins Review 2023: Is It Still the Best Way to Buy and Sell Bitcoin Locally?
Beyond Bitcoin
Another critical difference concerning real money, whether stored in the bank or cash under the mattress, is that cryptocurrencies are less susceptible to being seized by the authorities, which opens a debate on the ethics of this type of currency since the anonymity they guarantee means greatly facilitating money laundering.
At the end of December 2013, more than 60 cryptocurrencies were available for trading in online markets. Of these, the most important are the following:
BITCOIN (BTC/Ƀ)
Website: www.bitcoin.com
Creator: Satoshi Nakamoto (pseudonym) Year of establishment: 2009
Capitalization: 10,890 million dollars
Number of coins issued: 12.3 million (58.6% of total)
RIPPLE (XRP)
Website: www.ripple.com
Creators: Chris Larsen and Jed McCaleb
Year of establishment: 2013
Capitalization: 2,040 million dollars
Number of coins issued: 100,000 million (100% of the total) Comments: its operation is based on the transfer of debt through P2P (peer-to-peer)
in the same way that BitTorrent or eMule works.
READ MORE: How Ripple Cryptocurrency Works
LITECOIN (LTC / Ł)
Website: www.litecoin.com
Creator: Charles Lee
Year of establishment: 2011
Capitalization: $607.8 million
Number of coins issued: 25.2 million (30% of total) Comments: The first cryptocurrency based on a script (password-based essential derivation function)
PEERCOIN (PPC)
Website: www.peercoin.com
Creator: Sunny King (pseudonym) Year of establishment: 2012
Capitalization: $125.8 million
Number of coins issued: 21.1 million (100% of total)
NAMECOIN (NMC/N)
Website: www.namecoin.com
Year of establishment: 2011
Capitalization: 48.1 million dollars
Number of coins issued: 7.9 million (37.6% of total)
Comments: Namecoin also acts as an alternative and decentralized DNS system, allowing you to register uncensored .bit domains to which it is possible to add data.
WORLDCOIN (WDC/W)
Website: www.worldcoin.com
Creator: Nathan Gudmunson
Year of establishment: 2013
Capitalization: 14 million dollars
Number of coins issued: 42.1 million (15.9% of total)
DOGECOIN (DOGE / Ð)
Website: www.dogecoin.com
Creators: Jackson Palmer & Billy Markus
Year of establishment: 2013
Capitalization: 60.9 million dollars
Number of coins issued: 37,000 million (37% of the total) Comments: The first cryptocurrency based on a meme (the idea that spreads quickly)
originated on the Internet.
PRIMECOIN (XPM/Ψ)
Website: www.primecoin.com
Creator: Sunny King (pseudonym) Year of establishment: 2013
Capitalization: 12.8 million dollars
Number of Coins Issued: 4.2 million (there is no limit in the case of PrimeCoin, so right now, it represents 100% of the total)
And we could expand the list with many others: FeatherCoin, DevCoin, Freicoin, TerraCoin, … In short, a whole world to choose from.
Welcome to the new Forex
Logically all this barrage of cryptocurrencies has meant the appearance of what we could consider a new Forex market, in which crosses between all these new digital currencies are negotiated and crossed with real-world currencies. In this field, curiously, the Chinese have been the first to set up sizeable electronic cryptocurrency trading networks. And I say curiously because the Chinese government has also been the first to prohibit commercial transactions with Bitcoins.
Mong is the leading trading network; we have OKCoin, BitStamp, and BitFinex. Logically, as you can imagine, the trader’s imagination after visiting these websites begins to fly: arbitrage between the different networks spreads between cryptocurrencies and real currencies, or other more complex strategies begin to appear before our eyes.
All that glitter is not gold.
Apart from moral and ethical considerations (it is clear that this type of currency is very popular with drug traffickers and other types of organized crime) and the complex debate about whether this is the future of money, it is a bubble like the top of a pine tree, or if it is possible to escape the control of governments by changing all our money into a cryptocurrency, The truth is that cryptocurrencies open a wide range of speculative possibilities, yes, high risk. You only have to look at a BitCoin chart to get an idea that it is more of a roller coaster than a real asset, going from $ 400 to more than $ 1,000 and falling back to $ 800 in a matter of a few days. And to this, they must add that the regulator on duty decides overnight to declare one, several, or all cryptocurrencies illegal, which could cause us to lose all our money in minutes. In short, cryptocurrencies do, to some extent, but only invest up to 10% of our capital available for investments. Of course, do not even think about asking to pay your salary or bills with BitCoins, lest one day you get an unpleasant surprise (let alone if the computer where you have the digital key to access your virtual wallet breaks down and you lose access completely).
