Cryptocurrency is a digital currency that is used as a medium of exchange and stored as an asset for the purposeful investment. It has no physical face but has many different types, these are generated through a process of cryptographic techniques that also secures the storage of these highly transit money. It is usually accepted as the main reason, that Satoshi Nakamoto, the inventor of Bitcoins has given is that Cryptocurrency is the solution for removing the middle man from earning per transaction of our money while we do our transactions- be it shopping online or using credit cards. We all know how much it costs but the entry of cryptocurrency has reduced these overhead expenses.
What is Cryptocurrency?
Cryptocurrency is a decentralized money-making system that the government does not invade into. That is why is not very secure when it comes to the scams that have been taking place from the past some years. But the inventors have maintained a Blockchain system that keeps account of all types of cryptocurrency that is generated and used for transactions and other purposes such as investments. ‘Cryptography’ actually ensures a high level of security and integrity of ‘Cryptocurrency’ during transmissions.
Why this Cryptocurrency is so popular?
There are several reasons for the popularity being the use of Cryptocurrency:
- People think it will be the future medium of exchange that will be widely accepted all over the world.
- They are considered as precious as gold when it comes to investment.
- People want to store the future currency as much as they can now, so as to avoid getting it on high cost when their demand will touch the sky.
- People were so waiting for a way to avoid the middle man taking the scoop of their income from their investment basket, they are lured to better investment options where there is no transaction cost avail.
What is Bitcoin?
To understand bitcoins it is necessary to know what is cryptocurrency. Bitcoin is also a Cryptocurrency. Cryptocurrency is a digital asset that works as a medium of exchange. These can be used for shopping groceries and even shares from stock markets. These are largely accepted at some places like Amsterdam, San Francisco, and America. Also, companies like Microsoft, Wikipedia, Burger King, Starbucks, KFC, and Subway accept bitcoins and other popular cryptocurrencies.
So, this explains Bitcoins are cryptocurrencies that are accepted for purchasing and selling products and can replace currencies like dollars.
Hence, it is important to note that
- Cryptography is the use of algorithms and formula to make cryptocurrency and,
- Bitcoin is a popular and widely accepted cryptocurrency.
- Cryptography ensures the security regarding transactions of Bitcoins and their storage as, being a highly accepted currency there are chances of it to get hacked and robbed.
The process of generating cryptocurrency as Bitcoins is known as ‘mining’, it is a peer to peer electronic cash system that requires payment networks with accounts and balances for transactions that’s easy to understand. Each generated Bitcoin through mining is then added to a blockchain network that keeps an account for every spending and generating Bitcoins. Being a decentralized system this Blockchain is a highly secured network that cannot be hacked or altered in any way.
What is Alt Currency?
Cryptocurrency is an umbrella term used for all kinds of decentralized digital currency that is made through cryptography. Other than Bitcoin we have Zcash, Litecoin, Ripple, Ethereum, etc.
Altcoin/alt currency is again an umbrella term for cryptocurrency other than Bitcoins, after Bitcoins were popularly accepted Altcurrency was invented. Mostly they are like Bitcoins with peer-to-peer networks. However, they even offer efficient and inexpensive ways to carry out transactions on the internet. It has been 12 years now when Bitcoin was invented and after that, more than 5000 cryptocurrencies have been invented. They all are alt currency.
So to conclude, all these terms are interrelated but have a huge difference within. Even after coming out from each other. Being a widely used currency, these are highly risky assets to keep online. Scams like Ponzi and others have been warned to keep all your cryptocurrencies in an offline wallet, beware of all the fraudulent and malicious attacker. Be safe and invest after having prior knowledge in this area.
Author Bio: This article has been written by Rishika Desai, B.Tech Computer Engineering Student at Vishwakarma Institute of Information Technology (VIIT), Pune. She is a good dancer, poet and a writer. Animal love engulfs her heart and content writing comprises her present. You can follow Rishika on Twitter @ich_rish99, and connect with her on LinkedIn.