What is Cryptocurrency?

932 Words Feb 2nd, 2018 4 Pages
Cryptocurrency is a digital currency that uses cryptography for security purposes to make it hard for unscrupulous people to counterfeit. It is considered as fiat currency where its value is dependent upon its acceptance as medium of exchange.

Cryptocurrency is neither owned nor tied down to any country or can be affected by inflation and Central Bank policies. The transfer of currency from one person to another is done through public and private keys. Like Bitcoins, its most prominent example, transfers are cryptographically signed each time it is transferred. The value of the currency is dependent upon supply and demand and its price movements may be compared with that of gold and other precious metals.

History of Cryptocurrency

The first form of cryptocurrency was the Bitcoin that was invented in 2009. It is a currency that is defined by cryptography, rather than its country of origin like the American dollar, Indian rupee, or Japanese Yen.

Satoshi Nakamoto is said to be the pseudonym of an entity that created the Bitcoin software, Bitcoin-Qt. Nakamoto is believed to represent a diverse group of people rather than an individual, whose involvement in the original Bitcoin software does not seem to extend beyond mid-2010. Nakamoto is said to possess roughly one million Bitcoins which is equivalent to $1.1 billion as of December 2013.

Mining of Cryptocurrency (Bitcoins)

The operation of the earliest form of cryptocurrency, the Bitcoin, is…

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