Cryptocurrency: The New Digital Money

Cryptocurrency is a digital currency that uses cryptographic technology to provide security.

What is cryptocurrency?

The concept of digital currency secured by cryptography has been around since at least 1983, when American cryptographer David Chaum introduced the ecash. The first cryptocurrency to be recognized by the general public, Bitcoin (BTC), was launched in January 2009.

The main innovation of bitcoin was the use of blockchain. It is a distributed, cryptographically secured ledger of all BTC transactions that ever existed.

Blockchain allows the Bitcoin network, made up of many independent nodes, each participating on a voluntary basis, to function efficiently without the need for a central authority such as a bank.

Users can use the bitcoin blockchain to support and update with proof-of-work, a computationally intensive consensus algorithm based on cryptographic hash functions that ensures that no new bitcoin can be created without significant effort. All BTC transactions are reliably and permanently logged.

Bitcoin has spurred further growth in the cryptocurrency industry, which now has tens of thousands of different types of cryptocurrencies worth hundreds of billions of dollars. Like bitcoin, some of them are fully decentralized coins with a proof-of-work principle.

For example BCH (BC), Litecoin ltc or Monero XMR. Some use different consensus algorithms like Tron (TRX), Tezos( XT) or Dash. All of them use proof-of-stake – proof of ownership. Other currencies are based on private blockchains used by companies for internal use and are not available to the general public. All currencies have at least one thing in common: their networks are protected by cryptographic algorithms.