Hello and welcome to exampundit. As a part of our Banking Awareness series, today we are sharing Cryptocurrencies. We are listing down Important cryptocurrencies with the definition and process.
What are Cryptocurrencies?
Crypto is a word derived from Cryptography which is the study of writing and solving codes.
Cryptocurrencies are the currencies encrypted or encoded through cryptography. In other words, it is a digital currency in which encryption techniques are used to regulate the generation of units of currencies.
How is Cryptocurrency different from a normal currency?
The following unique features of cryptocurrency makes is different from a normal currency:-
- It is crypto graphed unlike any of the paper currency we use.
- It is not issued by any Government or central authority but instead is regulated by a complex network called ‘Blockchains’.
- There is no government intervention in the valuation or regulation of the value of a cryptocurrency.
- It does not involve any physical movement of the currency transferred from one place to another.
- These are highly secured. The database concerning the cryptocurrency cannot be easily changed or hacked.
How does a transaction in cryptocurrency takes place?
A cryptocurrency is created by miners. The whole process of how it works can be understood by the following diagram:-
Only a minor has the authority to validate a transaction. A transaction until verified can be forged. After being confirmed by a minor it becomes a part of the block chain and cannot be reversed or forged.
Who created cryptocurrencies?
The first ever cryptocurrency – BITCOIN – was founded/invented by the group or individual named as Satoshi Nakamoto in 2008 and introduced to the world in 2009.
Mostly the cryptocurrencies are written in C++ Language.
Petro launched by Venezuela. First cryptocurrency backed by Venezuela’s reserves of oil.
KodakCoin – by Kodak & Wenn Digital – KodakCoin is a “photographer-centric” blockchain cryptocurrency used for payments for licensing photographs.
List of Important Cryptocurrencies
|Bitcoin||First ever cryptocurrency|
|Ripple||Designed for peer to peer debt transfer. Not based on bitcoin.|
|KodakCoin||Eastman Kodak Company – photographer centric|
|Petro||Venezuela backed by Oil.|
|Petro||Venezuela backed by Gold.|
|Sovereign (SOV)||Marshall Islands|
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