In this short guide we shall talk about Cryptocurrency Bitcoin and Alt Coin.
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What is Cryptocurrency?
A cryptocurrency is a new form of digital payment. With cryptocurrencies the system uses encryption to regulate the movement of the currency, control and verify transactions, and in some cases generate new crypto coins.
Cryptocurrency in most cases runs anonymously so it can be hard to trace transactions to a single user.
Cryptocurrencies in most cases run without the need of a centralised bank and payments are sent through the network of users on the system.
Cryptocurrencies can not be reversed, once a payment is made through the cryptocurrency network the funds can not be recovered or reversed, this can be problematic for people buying goods or services from unknown or untrusted sources.
Due to the anonymity and irreversible payments the criminal activities have adopted using cryptocurrencies, but as cryptocurrencies are now more mainstream it is not just used by criminals and many big companies and genuine businesses are accepting this new form of payment.
What is Bitcoin?
Bitcoin is the first accepted cryptocurrency, and the most well-known popular currency of all the cryptocurrencies.
Officially Bitcoin started in January 2009 but was not very popular at the start, and it was not worth a lot in the beginning. It was created by an unknown group of programmers under the name of Satoshi Nakamoto, and the smallest value of Bitcoin is named after this. One Satoshi is one hundred millionth of a Bitcoin (0.00000001 BTC).
Since the creation of Bitcoin it has risen to a massive value of $10,000 per Bitcoin, but the value of Bitcoin is still volatile and does fluctuate, news can have a big impact on the value of Bitcoin in the same way that media can affect trading stock prices.
The Bitcoin was the first cryptocurrency to use what is known as a “blockchain”. The blockchain is a public ledger storing all of the transaction records, so when a new transaction happens it is recorded on the public block chain.
Each block in the Bitcoin blockchain happens approximately every 10 minutes and contains several transactions. The block is created by a network of computers called “miners”, and when each block is created a reward of newly created Bitcoins is given to the miners, this encourages miners to mine and keep the network of transactions running smoothly. See chapter four to learn more about mining cryptocurrencies.
What is Alt Coin?
Since the original Bitcoin cryptocurrency there has been many other cryptocurrencies that have been created, these other coins are are known as “Alt Coins” meaning alternative coins.
So any crypto coin that in not Bitcoin is known as an Alt Coin.
Most of the Alt Coins are basically copies of the original Bitcoin and use the same “blockchain technology”.
But not all of the coins are versions of Bitcoin, some of the currencies have copied the technology and tweaked it or changed parts of it to make new different features available in the new currency.
Also some of the Alt Coins have been built from scratch and each Alt Coin has its own merits, so before trading, mining, buying or selling in a new coin it is worth doing some research first.
There are new coins being created all the time and are too many to write about it here (although in chapter two we will talk about some of the best and new Alt Coins of 2017). At the time of writing this there are over 1000 different crypto currencies, although only about 500 are used by the public.
