Cryptocurrency companies like Bitcoin, Litecoin, and Ripple have become a global phenomenon known to most people. The digital currencies are blowing the stock market recently, making them one of the most rewarding investments this year.
While still somehow geeky or complex and not understood by most people, governments, banks and many investment companies are aware of the cryptocurrency importance.
What is cryptocurrency?
Cryptocurrency is a form of digital money designed to make transactions very secure and in most cases, anonymous. The complex currency is allied with internet that uses cryptography, a process of converting legible data into an almost uncrackable code, to process, track and secure purchases and transactions. Cryptography originated out of the need to secure communications during the Second World War.
Bitcoin was the first digital currency, created in 2009 and is still best known. It has been the trendsetter, ushering in a wave of other cryptocurrencies collectively known as altcoins, and have tried to present themselves as improved versions of Bitcoin.
Over the past year, Bitcoin value has surged, reflecting in public awareness and confidence around the cryptocurrency. Unlike regular cash, the cyber money has no physical presence and contrasts from regular transactions by using decentralized control as opposed to central banking systems.
In banking, governments or corporate boards control the money supply by demanding additions to digital banking ledgers or printing more units of money. In cryptocurrency, the production of currency is typically plugged. Bitcoin’s younger brother Litecoin consists of 84 million units, for example, as opposed to its sibling’s 21 million.