Cryptocurrency: What is it?

By now, you may have heard of cryptocurrency, such as Bitcoin, but you’re not sure exactly what it is…

Cryptocurrency is a digital currency which encryption techniques are used to regulate the units of currency and verify the transfer of funds.  There are several different cryptocurrency companies you may have heard of by now, such as Bitcoin, Ripple, Monero, Ethereum and Litecoin.

Here is an overview of each of them:

Bitcoin

The price of Bitcoin and other cryptocurrencies is unpredictable and can increase or decrease in a short period of time due to its new economy and liquid nature.  Bitcoin is a high risk asset.  Think of it as a high risk stock.  You can ride the excitement wave of this new currency, but shouldn’t put your savings into it.  In short, don’t invest more than you can stand to lose.  Today’s current price: $2,473.66.

 

Ripple

Ripple enables payments between banks no matter where the location, and this literally only takes 5-10 seconds for the exchange to take place.  Both receiver and sender are notified immediately upon payment exchange.  Ripple is something for the financial institutions to transfer funds to each other.  Today’s current price: 0.249.

 

Monero

The biggest difference between Monero and Bitcoin is that Monero is based on CryptoNote, which has algorithmic differences in blockchain obfuscation.  This cryptocurrency focuses more on privacy, where Bitcoin transactions are public information.  Monero uses ring signatures, making their transactions untraceable.  Today’s current price: $42.35.

 

Ethereum

This decentralized platform was developed by the Ethereum Foundation, a Swiss nonprofit, in which apps run on a custom built blockchain that can move value and represent ownership of property.  On a blockchain, anyone can set up a node (a computer connected to the network using a client that performs the task of validating and relaying transactions) that replicates data for all nodes to reach an agreement and be compensated by users.  With an Ethereum wallet, you can hold Ether, other crypto-assets, as well as write and use smart contracts.  Today’s current price: $268.78.

 

Litecoin

The Litecoin blockchain is able to handle a higher transaction volume than Bitcoin.  The network is scheduled to produce 84 million Litecoins, which is 4 times as many currency as Bitcoin. The company reports that there will never be any more than 84 million Litecoins, so you’ll never have to worry about inflation decreasing the value of your Litecoins.  The mining reward is currently 25 new Litecoins per block.  Today’s current price $40.01.

 

Coinbase

Coinbase gives you an easy way to sign up, create your digital wallet, and connect to your bank account, so that you can buy digital currency.  This gives you a digital wallet and a platform to buy and sell your cryptocurrency.

 

The main differences between the currencies are the platform usability, privacy, and trading price.  If you are interested in learning more about the different cryptocurrencies or getting started with your own digital wallet, click here to get more information on Coinbase where you can buy, sell, or review charts: http://bit.ly/2s0n4kS.

 

Contributed by Holly Picano

Sources other than those mentioned above:

https://www.smithandcrown.com/markets/

https://www.gdax.com

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