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What is cryptocurrency?
The inventor of the most famous cryptocurrency today – Bitcoin – attempted to build a “peer-to-peer electronic cash system”. This had been tried many times before but the main point of difference between Bitcoin and previous efforts like Digicash was that it was to be entirely decentralised. Without an overarching entity controlling the currency, the notion of “trust” would be removed from the system.
To combat “double spending”, the major flaw in all digital cash systems at that point, Bitcoin inventor Satoshi Nakamoto proposed a revolutionary technology known as the blockchain to record all the transactions made with his currency.
For any single balance, transaction, or change to the network to take place, there would need to be consensus amongst those validating the network – the miners. Since Bitcoin’s invent, many other programmers have attempted to use the model and tweak it to provide what they consider to be a more functional form of digital cash.
Other cryptocurrencies include Litecoin, Monero, Ether, and New Economy Movement. Many of these efforts tailor their currency for a special purpose. Speed, price, and privacy, are among the most common.