Cryptocurrency - what it is, the history of its creation. Using open source is a new vector of development

Blockchain is set to radically transform many sectors of the economy, but it is most often used in the financial sector, including traditional banks. Today we will look at the most promising blockchain project called Ripple, which is designed to transform the entire banking industry and significantly speed up all domestic and international money transfers.

How was Ripple created? Why is Ripple centralized? What are the goals of the project creators? About all this and more in our article!

History of the creation of Ripple

It all started in 2004, when programmer Ryan Fugger created the RipplePay payment platform, capable of making traditional P2P payments.

But such a traditional tool did not gain the popularity it deserved, and then Fugger decided to rebrand the company - make the payment protocol decentralized and transparent and allow banks to work without third parties. The company was called Ripple Labs, and the payment platform was Ripple.

At the beginning of 2012, Fugger attracted a large number of blockchain developers, with whom I actually developed a decentralized platform for making payments between individuals. Moreover, the crypto-asset XRP was created, with the help of which anyone can make highly liquid and instant money transfers.

Ripple is based on a unique RPCA protocol that can provide fast and safe way exchange of assets (fiat currencies, shares, precious metals, etc.). In turn, XRP can act as “fuel” for making payments.

Main features of Ripple:

• Mining of XRP coins is not provided, which means it is impossible. The project team itself mined about 100 billion XRP, of which 65% was kept at its disposal, and the remaining 35% was released to the market;
• The system does not use the blockchain familiar to everyone, but exclusively distributed database data. Servers are installed in Ripple offices;
• The network is constantly under the control of chief engineers, which makes Ripple more secure than other networks;
• 0.00001 XRP – mandatory commission fee when making payments. This is so that spammers do not have the opportunity to bring down the network. As often happens, spammers create a large number of false transactions, and if this happens with XRP, then the spammer will end up with quite a lot of money;
• Cooperation with the largest banks and financial conglomerates who want to use the Ripple payment protocol in their systems;

The main advantages of Ripple:

• The highest speed of payment processing (3-4 seconds);
• Increased security and unprecedented protection against cyber attacks;
• Possibility to cancel a payment;
• The ability to exchange one asset for another, including a traditional asset;

However, like any other high-tech product, Ripple has disadvantages. In particular, this monopolization and centralization of the company. Yes, Ripple is a centralized network, so a team can easily manipulate the XRP rate, block suspicious transactions, and also constantly release the required amount of XRP onto the market, thereby deliberately underestimating or inflating the price of XRP.

Ripple blockchain solutions:

• xCurrent– a corporate platform designed specifically for banks and financial institutions. Uninterrupted operation, flexible in configuration and has a privacy function. Everyone who uses xCurrent will be able to confirm payments made in real time;
• xRapid– a popular platform for processing services seeking to speed up payment settlements;
• xVia– a new API platform for banks that does not require software installation. It allows you to send invoices and confirm payments in real time. xVia can be considered an “improved xCurrent”;

Where to buy and store XRP?

Since Ripple is ranked 3rd in the ranking of cryptocurrencies according to data, there will never be any problems with the purchase. The cryptocurrency is supported by almost all crypto exchanges: Bitbank, Bithumb, OKEx, Huobi, Bitfinex, Upbit, HitBTC, Bitstamp, Coinone, BCEX, Kraken and dozens of others. The most reliable ones include Binance and Bitstamp.

Storing XRP is also simple. Coins can be stored on Gatehub, Toast Wallet, Virrex.io, or the Ledger Nano S hardware wallet. Be responsible about the safety of your wallet’s private keys, because without them you will not have access to your XRP savings.

Is it worth investing in Ripple?

I believe that in the near future, Ripple’s blockchain solutions will be used as the main systems for making cross-border payments.

Today, Ripple is used by such major banks as UniCredit, UBS, Santander, Credit Agricole, etc. Moreover, such IT corporations as Microsoft and Google are strategic investors and partners of Ripple. Judge for yourself, if such giants invest in Ripple, it means that the company is truly promising, and the blockchain solutions are innovative. We definitely add XRP to our portfolio, but it’s up to you to decide how many coins.

The Internet has become as natural to us as water is to fur seals. We sell and buy, work, arrange our personal lives, and have fun. Through the network. But traditional fiat is not very suitable for paying for all these transactions. Therefore, they created Internet banking, digital money, and, later, the most secure, anonymous cryptocurrencies.

Most users think that story Cryptocurrencies began from the moment the first Bitcoin was mined. But, in fact, it all started 30 years earlier...

Background to the creation of cryptocurrencies

Thoughts on creation global information network began to become a reality in the 60s of the twentieth century. But for real practical use she received it in the 80s. Then the network began to be used to exchange brokerage data needed for stock trading. It was during this period that the concept was born creation electronic money, which could be used for quick settlements for purchased shares, other financial assets and their derivatives. The concept was developed by Stefan Brands and David Chaum.

DigiCash Development Team

In 1990, they founded the DigiCash company, whose main product was electronic monetary system eCash. It had cryptographic protection and ensured the confidentiality of payments. But, this platform was completely centralized, unlike modern cryptocurrencies. The platform went bankrupt in 1998, becoming one of the warning signs before the global dot-com crisis.

eСash interface

It is also worth remembering another enthusiast,who made a historical contribution to the development of cryptocurrencies –Adam Bakov. It was he who, in 1997, first used the HashCash technology, which allows one to successfully resist DoS attacks, preserve financial resources and the functionality of the decentralized system.

How does HashCash work?

This technology has become one of the basic concepts of blockchain. Therefore, in 1998, armed with the HashCash algorithm, developers Nick Szabo and Wei Dai, separately from each other, launched digital projects B-money and Bit-Gold. They were based on decentralized systems for controlling inflation, and, in fact, were the prototypes of modern cryptocurrency. That same year, another IT specialist, Hal Finn, created the world's first hash block chain. In the future, he will become the second person after Nakamoto to join the Bitcoin project.

The birth and development of Bitcoin

The dot-com crisis of 2000 greatly undermined the position of high-tech projects. Investors feared another financial bubble and were in no hurry to invest in new digital platforms.

Seven whole years passed until the real era of cryptocurrencies began. First things first.

2007

According to the main version, it was this year that Satoshi Nakamoto came up with the concept of the first global cryptocurrency.

2008

Nakamoto publishes in open access a file with basic information on the planned launch of Bitcoin. The principle by which the future cryptocurrency will work was fully described.

January 2009

This month has gone down in history digital money as a breakthrough. It was then that the first Bitcoin 0.1/0.1.0/0.1.5 clients were developed. Work was also carried out to simplify the client for OS Windows NT/2000/XP.

In January, the system was launched and the first block of data was generated. The first 50 BTC have been mined. After this, Nakamoto and the previously mentioned Hal Finney carried out the first transaction, sending 10 BTC. The cryptocurrency was tested in “field” conditions and showed its readiness for global use.

September 2009

One of the early Bitcoin enthusiasts, Martin Malley, was the first to exchange the cryptocurrency for fiat. Using payment system New Liberty Stantard, he bought 5.02 USD for 5050 BTC and transferred it to his PayPal account.

November 2009

The beginning of the formation of the first cryptocurrency message. The Bitcoin.org forum was launched, bringing together highly specialized specialists in the field of IT, cryptography, and finance.;

December 2009

Bitcoin client 0.2 launched. It was multi-threaded, which made it possible to significantly improve the technology for mining new coins. From that moment on, cryptocurrency began to attract ordinary users who were looking for opportunities to earn extra money;

Summer 2010

Bitcoin version 0.3 is released. After this, a significant increase in the number of users began. The difficulty of mining has also increased. Computer processors could no longer cope with coin mining, so the process switched to using GPU video cards.

Bitcoin ver 0.03

August almost became the last in the history of Bitcoin and the entire cryptocurrency sphere. A bug occurred that prevented us from analyzing the terms of the transaction before it was carried out. As a result, Bitcoin was attacked by hackers who generated 184 billion coins (with their maximum quantity in 21 million pieces). The developers still managed to quickly eliminate the vulnerability, and the scandalous transaction was cancelled, i.e. billions of coins seem to have never existed.

November 2010

The number of miners is growing and there is fierce competition for new coins. Users are beginning to join together in mining pools to aggregate power and increase the volume of coin generation and their distribution among participants. The first mining pool was called Slush`s Pool (BPM).

Slush's Pool (BPM)

At the very end of 2010, as planned, the final version of the client 0.3.9 was released. At the same time, the ideologist of the project, Satoshi Nakamoto, left the project without explanation.

Satoshi Nakamoto

Since no one had ever seen him, various conspiracy theories began to emerge. The most popular of them claim that behind the name Nakamoto was hidden a group of developers or even an alliance of computer equipment manufacturers, who thus decided to increase sales. But the fact remains that after Nakamoto left, the rest of the Bitcoin developers are starting to think about creating alternative cryptocurrencies,

The era of altcoins, forks and soft forks begins.

The beginning of the altcoin era

After Nakamoto left, the creators of Bitcoin were divided into traditionalists and those who were not afraid of innovation. Thanks to the latter, the cryptocurrency niche began to rapidly evolve, scale and develop.

2011

Amir Taaki developed BIP technology, which made it possible to improve the existing Bitcoin client structure, and helped eliminate many critical errors in the code.

The first altcoins appeared that were based on the Bitcoin blockchain, namely: iXCoin, SolidCoin, Namecoin and others.

Difference between BTC and LTC

In the same year, the first full-fledged fork of BTC – Litecoin took place. It is very similar to its ancestor, but is more seriously protected, and transactions are carried out faster. Litecoin mining is also much more affordable.

2011 – marked by a boom in development mobile applications for working with cryptocurrencies.The Ripple cryptocurrency was launched, with a completely different blockchain structure, a special concept of development and use. Positioned as a complete analogue of the imperfect, original Bitcoin.

2012

There have been important changes in the cryptocurrency space. Firstly, they came up with a multi-signature, without which it is impossible to conclude a full-fledged smart contract.

Also. For the first time they started talking about the problem of block size in the Bitcoin chain. They began to attract specialists from related fields to solve this problem in the form of increasing the size through a soft fork. The created Cryptonote technology is still used today to launch new cryptocurrencies with the maximum degree of protection and high speed conducting transactions.

The latest version of CryptoNote uses Monero

It was in 2012 that the development of widely used, this moment, versions of online wallets for cryptocurrencies.

Period of active development

After the technological breakthrough of 2011-2014, cryptocurrencies began to appear with increasing frequency.

During the period 2014-2016, several hundred new coins were launched, including such legendary and popular coins as DASH, Monero, Ethereum, IOTA, Zcash and others.

ICO launches scaled the industry and attracted significant investments from major financial players and ordinary users.The history of the development of this niche deserves separate study.

Today, more than 900 cryptocurrencies are available to users. Many of them face such problems as legalization, exchange rate stabilization, popularization, improving functionality and increasing security. But, despite all these serious challenges, we can say that cryptocurrencies are already being used much more actively than 2-3 years ago.

Cryptocurrency - the principle of operation of tokens is considered a controversial topic in the media. Some see coins as another bubble, doomed to burst, while others see them as promising investment and trading areas. There is an opinion that crypto is the future of all e-commerce.

Cryptographic currency is a virtual means of payment that exists only on the Internet and operates on a decentralized basis. What does it mean? The answer lies in the principle of how cryptocurrency works.

What it is

Ordinary money is universal remedy for exchange: almost everything is bought with banknotes. The seller and buyer both recognize the value of money and agree to recognize the specific value of the product or service. Means of payment difficult to make, and counterfeiting is punishable by law. What is easy to obtain does not become valuable - you cannot pick a leaf from a tree and buy food.

The economy does not stand still, and the next stage of development was the emergence of digital means of payment. Electronic money is easy to manage and suitable for non-cash payments, including online.

An additional feature of cryptocurrency is the principle of decentralization. This implies a peer-to-peer system, where all participants are equal to each other. No single server or the main center on which everything that happens on the periphery depends. In a decentralized system, to confirm a transaction, the bank is not contacted. single center, but to any nearest node.

Who releases

The principle of operation of cryptocurrency is impossible without the mining process. Cryptocurrency schemes are almost always based on a blockchain - a chain of sequential blocks of information that cannot be deleted or changed. Each block contains information about all transactions carried out during Lately transactions, the computational sum of all previous blocks. If one block is modified, the sum does not match, an error is detected. In this case, the blockchain will be instantly copied from other participants in the system, since copies are stored everywhere. This is why hacking the blockchain is impossible.

The search and validation of new blocks is carried out using mining. For this to happen, the miner must run special application on the computer. The program will iterate through possible solutions and look for a hash. The process requires high computing power, therefore, in the case of altcoins, mining rigs from modern video cards are used, and for Bitcoin mining, super-powerful ones are used integrated circuits called ASIC.

Structure

Blockchain platforms are distinguished by the fact that the records stored in the block chain track each and every movement of digital money up to the first transaction. Having drawn conclusions through calculations, it is theoretically possible to find out the balance of any user’s wallet.

Based on the data, the miner program determines the possibility of carrying out a transaction and confirms it. The transaction is then added to the block with the others. For finding a transaction, the miner receives a monetary reward.

To transfer money, you need to pay a commission, and in some systems (for example, Ethereum) the user determines the amount of the commission. The larger the fee, the faster the transfer.

Advantages over fiat money

Users like cryptocurrency for a number of reasons:

• absence of intermediaries during transfers, which makes transactions faster and cheaper;
• high level security - you can only access the wallet with a special private key;
• there is no centralization, which makes hacking more likely.

Not without its shortcomings. These are problems with the scalability of networks, causing transactions to become slower when there are many of them. Using Bitcoin as an example, each transaction now takes on average 15 minutes. It’s still faster when compared to cross-border transfers through banks. Another disadvantage is high volatility, that is, constant jumps in token rates. It is difficult for investors to calculate whether to invest in a coin.

Why is cryptocurrency needed?

In a broad sense, the purpose of digital money is no different from conventional money. The principle is to exchange virtual coins for services or goods. There is an opinion that the world is still far from this. Most countries are not ready and do not want to accept cryptocurrency as a full-fledged means of exchange. Coins are still seen more as short-term or long-term investments.

Traders skillfully speculate on changes in rates, and volatility plays into their hands here. By buying and selling in time, you can make a noticeable profit. Investors invest large sums for a long time, in the hope of getting a big jackpot in 1-2 years. Both strategies have the right to life.

All fiat money is similar to each other - the essence is the same. When it comes to cryptocurrency, real competition is heating up. The five leading currencies in 2018 by market capitalization (total investment):

1. Bitcoin is “digital gold”, the cost of one coin is $6353.29.
2. Ethereum - coin price $197.37.
3. Ripple - rate $0.447468.
4. Bitcoin Cash - $420.21.
5. EOS - $5.16.

Each of these crypto coins has features that distinguish the token from others. These are mostly technical aspects, but often the difference is in the goals. Ethereum is primarily a platform for creating applications. Ripple is focused on commercial areas and financial operations between large companies.

Cryptocurrency calculator

People involved in the cryptocurrency space often feel the need to convert one currency to another, or to fiat. The easiest way to do this is with a calculator.

How to buy cryptocurrency

The easiest way to purchase digital assets is through relevant online exchanges and exchanges. There are many reliable options, so you have to choose the most favorable rate.

List of profitable crypto exchanges

Platforms worthy of attention:

• Bittrex;
• EXMO;
• Binance;
• YoBit.

The principle of operation of a cryptocurrency exchange is the ability to choose the cheapest option for purchase and the most expensive option for sale. Cryptocurrency trading is not that simple. It is recommended to understand technical analysis, orders, rate charts.

Before starting trading on your own, it is advisable to familiarize yourself with the basic concepts and rules of trading on a specific cryptocurrency exchange.

Where to store

Crypto is stored in wallets specially designed for this purpose. Wallets differ in operating principle: software, hardware, hot, cold. Some are more reliable, while others focus on operating comfort. Security is ensured by assigning unique addresses to each transaction. Addresses act as temporary intermediaries and prevent a third party from finding out the sender's true wallet.

Why cryptocurrencies have become popular

When it appeared in 2008 innovative technology, only enthusiasts were interested. However, the technology continued to function year after year, with almost no failures (in 9 years - only one software error). Gradually the system became more popular, everything more people saw potential in her.

The blockchain, on which almost all digital coins are based, ensures a high level of transaction security, prevents information from being changed after being placed in a distributed ledger, reduces costs due to the absence of intermediaries, and erases international borders. For users, blockchain applications are convenient and easy to use.

When smart contracts were invented, it became a revolution in the automation of transactions between users or a seller and a buyer. A new era has arrived in improving online transactions.

Anonymity played a significant role in the popularity of the crypt. You can see the Bitcoin wallet address, but you cannot determine who owns the wallet. This principle has made digital money a convenient means of payment in all countries of the world. Wherever a person goes, you can pay with Bitcoins without extra fees, unless outlets support this payment method.

In some countries, for example, the USA, it is already possible to cash out Bitcoin without using crypto exchanges. There are special Bitcoin ATMs for this.

In contact with

The 21st century is a time of rapid development and technological progress. Every day innovations are entering our lives more and more closely. Various new products appear that turn everyday life upside down, improving it and making it easier. Whatever one may say, one of key roles money plays a role in society, and it would be strange if progress did not touch these important pieces of paper for us. In this article I will tell you what cryptocurrency is, how it originated and how it is mined.

What is cryptocurrency

If previously only the inhabitants of the Internet heard about cryptocurrency, today it has proudly gone offline and has considerable resonance in society. However, not everyone knows what it really is and where it came from. Some do not believe that such money can exist in principle. Others call cryptocurrency the hoax of the century and rank it among. This heresy, of course, has nothing to do with reality. Crypto is a real currency that exists virtually. But this does not prevent you from paying with bitcoins in stores, cafes, or exchanging them for fiat cash directly at ATMs!

Cryptocurrency is a digital currency whose existence is based on the cryptographic principle. In simple, human language, these virtual money are unique cryptographic codes and have no material analogue. It cannot be touched or put in a wallet, it exists only on the network and does not go beyond its borders.

Such coins do not exist, crypt is exclusively on the Internet

Cryptosigns emerge in an unconventional way. If the money we are familiar with is issued by a certain issuer - the main bank of a particular country - then crypto arises without the participation of any central authority. New cryptosigns arise by generating new codes, which is done by computer technology - even your PC is capable of this. Further, the cryptocurrency is not concentrated in a single storage; it is distributed among the wallets of its owners. There are no crypto tokens that do not belong to anyone - all of them are stored in wallets real users(with the exception of the lost ones, but I will talk about this phenomenon further).

From all of the above, it follows that no one can control crypto, somehow regulate its rate, quantity, or produce it in other ways not provided for by its nature. This is a big step forward, because for the first time money does not depend on the issuer, the economic or political situation in the world. The exchange rate depends on the demand for it: the more people who want to purchase this or that crypt, the higher its price will be and vice versa. The rate also depends on the hype around the currency and on large investors.

And the number of people wanting to buy cryptocurrency is growing every day. Some buy it for the sake of interest and future prospects, others make money from the course, and some succumb to the general hype. Either way, she's popular. And if a couple of years ago almost no one in the offline environment knew what cryptocurrency was, today there is a real crypto movement, when not only adventurers, investors, IT specialists and ordinary people on the Internet, but also government agencies paid attention to it.

Advantages and disadvantages of cryptocurrency

In many ways, this excitement was facilitated by the advantages of cryptocurrency, of which there are many:

• Decentralized - the crypt does not have a body that would issue or control it.
• Anonymity – each user of cryptosigns remains unknown. After all, your personal data is not indicated either when registering a wallet, or when using it, or during transactions - complete confidentiality.
• Price volatility – almost all cryptocurrencies are characterized by high volatility, that is, their rate fluctuates non-stop and in different directions. For example, by buying one in the morning and selling it in the evening after the rate has risen, you can get rich by several hundred dollars at once.
• Possibility of mining - anyone who expresses a desire can start mining cryptocurrency, and absolutely free.
• Impossibility of inflation - most cryptocurrencies can only be generated up to a certain, predetermined number (for example, for Bitcoin it is 21 million coins).

However, crypto has not only advantages, but also some disadvantages. First of all, it does not have official status, and in some countries it is even prohibited. And its anonymity contributes to the fact that it is used with great activity by Internet scammers. Well, it doesn’t add points to the crypt that if you lose your password, the money in your wallet is automatically lost - it’s impossible to access it without authorization.

Bitcoin rate growth

History of the creation of cryptocurrency

It’s worth pointing out right away that cryptocurrency arose precisely at the moment when humanity began to need it. The instability of fiat money, inflation and the wave of crises that swept through many European countries, contributed to the fact that society simply needed independent and reliable money.

In 2008, people started talking about cryptocurrency for the first time, albeit in a rather narrow circle of IT specialists. The impetus for this was the publication of an article about the first virtual currency based on the principle of cryptography - Bitcoin. Some Satoshi Nakamoto outlined his concept of crypto money. And the conversations would have remained just conversations, but a year later the Bitcoin network was launched, and then the first wallets, which laid the foundation for a new cryptocurrency era.

Alleged creator of Bitcoin

The Bitcoin mining process has begun, albeit rather inactive. Many IT specialists did not fully understand what cryptocurrency is and what prospects it might have. Some people mined bitcoins for fun, while others still saw them as the money of the future. But probably no one except its creator understood what heights the pioneer of the cryptocurrency family would be able to achieve. Satoshi Nakamoto mined bitcoins on special equipment, while everyone else used simple computers, which helped him take possession of 1 million coins.

By the way, it is not known for certain whether the founder of Bitcoin was an individual person or a whole group of people, but very soon Nakamoto disappeared. And along with it, the trace of a whole million cue balls was lost. Many economists argue that if Satoshi suddenly shows up and decides to sell his cryptocurrencies, this will wildly shake the Bitcoin rate and cause a real collapse for BTC holders.

Pizza worth 10,000 BTC

The Bitcoin system was being improved, errors and shortcomings were eliminated, and at this time active mining of crypto coins was carried out. Already in 2010, the first purchase for bitcoins took place. One of the miners who accumulated 10,000 BTC exchanged them for two pizzas, which at the exchange rate of that time was equal to $50. This acquisition went down in history not only as the first incident of exchanging bitcoins for goods, but also as the most expensive pizza in the history of mankind - at the current exchange rate, the purchase amounted to about 24 million dollars!

Pizza for 10 thousand bitcoins is far from the only case when cryptocurrency was treated with great disdain. Tens of thousands of bitcoins disappeared along with the equipment they used to mine. After all, many of their owners, after the PC malfunctioned, did not consider it worth removing HDD with the now expensive crypto.

But the times of skepticism towards Bitcoin are over; its rate began to grow rapidly. And at the same time, like mushrooms after rain, new cryptocurrencies began to appear - forks (from the English fork - fork), altcoins, which are launched daily and it is already difficult to count the number of active cryptocurrencies.

Cryptocurrency mining

Thanks to the open source code, absolutely anyone with computer technology and an Internet connection can engage in cryptocurrency mining. At the same time, your personal computer is quite suitable for mining many cryptocurrencies.

The essence of mining comes down to solving complex mathematical problems, as a result of which new information blocks are opened, representing a certain sequence of ones and zeros. A person is not able to solve such problems on his own, but computer technology is quite capable of doing so. Solved blocks are transmitted to the network, and the miner receives a reward in the form of crypto tokens.

It is quite logical that the more unique blocks are solved, the more difficult it is to find new ones and the technology has to put more and more effort into this process. It follows from this that the more of a particular crypt has already been mined, the more difficult the process becomes and the less reward miners receive.

Bitcoin farm

For example, initially bitcoins were mined by PCs and the reward for blocks was 50 BTC. After active connection to the mining process of users around the world, mining Bitcoin has become more difficult. The computer has become an unproductive means of mining, since the bitcoins obtained this way do not even cover the electricity bills.Since the number of cue balls is limited by the final generation figure, the block reward is halved at certain intervals. Today the reward is 12.5 BTC.

Despite the decrease in rewards and increase in difficulty, miners do not stop mining, although many experts admitted that these two factors could seriously reduce the number of miners, and therefore lead to the decline of the cryptocurrency. The fact is that technical progress does not stand still and mining capacities are also being improved. The latest ASIC miners allow you to solve hundreds of thousands more problems than a PC, and even with reduced energy consumption.

Cryptocurrency mining, view from the inside :)

Transaction confirmations and mining

Mining plays a role not only in the extraction of cryptocurrencies, but also in confirming transactions. In order to transfer bitcoins or other coins from wallet to wallet, it is necessary not only to complete the transaction, but also to confirm it with other participants in the system. That is, enter this operation into the block chain, which is what miners do. For this they receive a reward in the amount determined by the initiator of the transfer.

The higher the commission you are willing to pay, the faster the confirmation will be completed. There are options for transfers without commission, but in the best case, they are carried out in a few days, and in the worst, the funds may freeze or, without receiving confirmation for the transfer, will return back to their owner’s wallet.

Why are transaction confirmations needed?? This is a kind of system protection - attackers who are going to forge transactions need enormous power computer technology. It has been established that in order to forge 6 confirmations, a hacker must have computing devices for several million dollars, which reduces the risk of attack to a minimum.

The most popular cryptocurrencies

So, we talked about what cryptocurrency is, where it came from and how it is mined. It's time to talk about what the most popular and popular cryptocurrencies exist in our time. As I already mentioned, after the success of Bitcoin, cryptocurrencies began to be actively launched, and many of them reached good level development and distribution. Although none of the younger brothers managed to surpass the cue ball, many of the crypto signs described below have a real chance of competing with it.

Bitcoin(BTC) is the most popular cryptocurrency. A pioneer with a market capitalization of over $40 billion. In addition, Bitcoin is also the most expensive currency - its exchange rate at the time of writing was $2,484 per 1 BTC. It is the cue ball that has become most widespread - it is recognized at the state level in many countries, offline terminals are installed, and used as an investment tool.
More information about BTC: , .

(ETN) is a crypt invented by a young developer with Russian roots, Vitalik Buterin. Ethereum, also known as Ether, is not a fork of Bitcoin and uses its own source code, on the basis of which many cryptocurrencies have already emerged. The ether exchange rate reached $222 per 1 ETH, and capitalization reached $20 billion. Ethereum is considered the main competitor of Bitcoin.

Ripple(XRP) – launched in 2012. In terms of capitalization, it is the third currency - $11.5 billion, and the rate is $0.29 per coin. The Ripple protocol is widely used by both banking institutions and payment systems, which is explained by a number of advantages that Bitcoin does not have (no commission, instant transfers, etc.).

Litecoin(LTC) is a fork of Bitcoin launched in 2011 that has achieved significant popularity. The cryptocurrency rate is $27, capitalization is $1.4 billion.

NEM(XEM) is a second generation crypto that positions itself as “socially oriented”. At an exchange rate of $0.22, the market capitalization is more than $2 billion.

Dash(DASH) - appeared in 2014 as XCoin, then experienced the first (Darkcoin) and second (Dash) rebranding. It is recognized as an improved currency, because unlike Bitcoin, it has transaction anonymization, reduced energy costs during mining and uses several cryptographic algorithms. The exchange rate is $145, capitalization is more than $1 billion.

Cryptocurrency is a specially created alternative banknotes and is a fast and reliable method of payment on the Internet.

Cryptocurrency is based on modern new technologies and is completely independent of the government, a barrel of oil and the dollar.

Any of the existing types of cryptocurrencies are protected by cryptography.

The most striking and popular representative of cryptocurrencies is the world-famous Bitcoin, which translated from English means minimum unit electronic information, in coins.

Often, in stock trading, the main abbreviation BTK or BTC (in English) is used.

How does cryptocurrency differ from other currencies and electronic means of payment?

Electronic currency, such as Bitcoin, for example, differs significantly from other methods electronic payments and from money, in that:

1. Availability and widespread, since the electronic money network is a combination of all client programs or electronic wallets and one database, which can be on each PC where there is a complete client package. Electronic currency is presented for open viewing and full access to operating system. You can easily connect to such a system, while having online wallet on special service. You can work with electronic money from anywhere in the world.
2. Simplicity and openness of all payment transactions. At any time, anyone can view the history of all payments and track all payments since the coins were generated, and the history is never deleted from the database. Knowing only a Bitcoin address, you can find out at any time all transactions received by or sent from that address.
3. Lack of constant, systematic control, namely the entire database is distributed on a peer-to-peer basis and does not have a control center that can block or freeze finances, stop or verify payments. However, there are some commissions, the size of which is completely insignificant, relatively total amount translation. At the same time, you need to know that all transactions are irreversible and irrevocable, and there is no way to cancel them.
4. All calculations are anonymous and convenient. If you wish, you can enter your address and account number into the system yourself.
5. High level of protection of payments and personal data.

Rating of the most common cryptocurrencies

At the moment, after just a short amount of time, there are many popular cryptocurrencies in the world, which have many differences, according to the following characteristics:

• financial calculation systems;
• method of withdrawing money;
• emission;
• profit of cryptocurrencies.

1. Bitcoin, is the most widespread and relevant cryptocurrency, which was the basis for the creation of all other types.
2. Litecoin, which is most often called “electronic silver”.
3. Peercoin, the code of which is completely a copy of Bitcoin, but mainly differs in the fact that there are no limits on the number of coins issued.
4. Namecoin, formed on the basis of alternative DNS servers and control over domain names ICANN.
5. Feathercoin, is identified as the currency successor to Litecoin. But today, we can say with firm confidence that this is the most secure currency on the trading market.

Ever since Bitcoin emerged as an alternative currency, forks have been appearing every minute. And experts predict a constant increase in new cryptocurrency opportunities.

Cryptocurrency Bitcoin – virtual gold

Cryptocurrency is based on mathematical systems and algorithms that guarantee smooth operation.

Bitcoin users, known only as “miners” or miners, offer their power to solve various issues and are generously rewarded with cryptocurrency for this.

Modern analogues of Bitcoin are just clones, but some of them are so successful and in demand that they will provide healthy competition to Bitcoin. This is due to the fact that some analogues have improved functionality and unique advantages that, alas, Bitcoin does not have.

Today, cryptocurrency such as Bitcoin occupies by far the leading position in the market and is worth $8.3 billion.

Neither politicians, nor presidents, or any elite forces of this world have any opportunity to interfere with the order of the cryptocurrency system and that is why there is no inflation. It is this fact that determines the common name of Bitcoin - “virtual gold”.

Cryptocurrency Litecoin

In transcript, Litecoin means light coin and is an analogue or fork of Bitcoin. Litecoin is mainly used as an electronic payment cryptocurrency in a peer-to-peer system.

Actions with Litecoin are based on working with a decentralized system, using only the available source code.

Litecoin is an analogue of Bitcoin, but only with more advanced characteristics, and today it ranks second in the ranking.

Litecoin can be used as a means of exchange for Bitcoin or ordinary monetary units. Litecoin is also used to pay for electronic goods and services.

How cryptocurrency works (using Bitcoin as an example)

Each trading participant using Bitcoin can perform instant manipulations and transactions without involving intermediaries and third-party sites. Thus, we can say that the buyer directly transfers to the seller cash. Coins in the system are cryptographic (mathematical) hash codes. Each one is completely unique and cannot be used twice.

It is worth understanding that, like any monetary unit, Bitcoin and any other cryptocurrency has its own exchange rate.

Applications of cryptocurrency

Cryptocurrency can be used to pay for services and purchase various goods on the Internet, completely anonymously. In addition, thanks to cryptocurrency, it is easy to make international payments, since Bitcoin and its analogues are not tied to any particular country.

In order to store cryptocurrency you can use:

• offline wallets that are created on a PC and protect against hacking. However, if you lose your password and there is no way to recover it, you may lose access to your finances forever;
• online wallets, which have their own advantages and disadvantages. For example, to manipulate finances, you can use not only a computer, but also a tablet and a phone. The downside is the fact that if the system is hacked, then all the data and finances will be hacked.

Advantages and disadvantages

Like every currency, cryptocurrency has both advantages and disadvantages over ordinary money.

Advantages of cryptocurrency:

• The source code is always open, and has similar algorithms to online payment stores and banking. Also in cryptocurrency, all operations, even the outcome, are hidden and there is no information about the recipient or the seller;
• lack of inflation, as well as the fact that the number of coins is directly proportional to the level of gold production on the planet. But at the same time, maximum value All bitcoins are limited to 21 million coins. It is thanks to this that cryptocurrency is more reliable than the planet’s gold reserves;
• peering network in the cryptocurrency system, namely the complete absence of a central server that can control financial transactions. Neither banks nor any government services can control or interfere with the process of exchanging money between two wallets.;
• unlimited possibilities on the network, i.e. every user can pay and transfer money anywhere and to anyone;
• a combination of freedom and security of transactions, namely the fact that money cannot be withdrawn, stolen, spent twice, and payments themselves cannot be canceled. These characteristics make it possible to ensure complete safety systems.

Every day everything becomes more systems and Internet resources that accept Bitcoins.

Disadvantages of Cryptocurrency

So far, the only drawback of cryptocurrency is the strong influence of world news on the rise and fall of Bitcoin’s value.

In almost all situations, the growth of the exchange rate depends on statements made by government representatives of different countries.

At the same time, it is in the short-term version of the market that high volatility can create trouble.

How to get cryptocurrency?

Any cryptocurrency is mined through a process called mining. The very essence of the process is that the new formation of, for example, bitcoins comes down to the fact that it is necessary to solve a complex crypto-problem using a full-fledged search method.

Standard, ordinary PCs are completely unsuitable for such actions; heavy-duty computer systems and servers would be an ideal option. During the mining process, you need to solve mathematical puzzles, the winner will receive 25 bitcoins.

In addition, due to the fact that cryptocurrency has become so popular, you can use other methods, for example:

• receive cryptocurrency for purchasing goods or services;
• buy cryptocurrency;
• receive currency from another user.

Modern cryptocurrency market

Based on changes in the cryptocurrency rate, you can make some interesting conclusions, for the future. The increase in the cryptocurrency indicator has an exponential graph, or, more simply put, it can be quite predictable and an investment niche can be formed on this.

But nevertheless, it is worth understanding that investing in cryptocurrency also has risks that manifest themselves mainly in the medium or long term.

But everyone agrees on one opinion - cryptocurrency is the future, which will combine real and virtual money, only with the best characteristics.