There are many different types of cryptocurrency, but these eight are among some of the more well-known currencies. Bitcoin BTC One of the most commonly known currencies, Bitcoin is considered an original cryptocurrency.
Bitcoin: How Cryptocurrencies Work
It was created in as an open-source software. The author of the whitepaper that established this digital currency was under the pseudonym Satoshi Nakamoto.
See also: History of bitcoin Inthe American cryptographer David Chaum conceived an anonymous cryptographic electronic money called ecash. This allowed the digital currency to be untraceable by the issuing bank, the government, or any third party. The first decentralized cryptocurrency, bitcoin, was created in by presumably pseudonymous developer Satoshi Nakamoto. It used SHAa cryptographic hash function, in its proof-of-work scheme. Soon after, in OctoberLitecoin was released.
How does Bitcoin work? Using blockchain technology, Bitcoin allows users to make transparent peer-to-peer transactions. All users can view these transactions; however, they are secured through the algorithm within the blockchain.
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Unlike a bank, there is no central authority figure in the Bitcoin. Bitcoin users control the sending and receiving of money, which allows for anonymous transactions to take place throughout the world.
Like other cryptocurrencies, Litecoin is an open source, global payment network that is completely decentralized, meaning there are no central authorities. Here are a few differences between these digital currencies: Litecoin is believed to feature faster transaction times.
Bitcoin continues to lead the pack of cryptocurrencies, in terms of market capitalization, user base, and popularity.
The coin limit for Bitcoin is 21 million and Litecoin is 84 million. Ethereum ETH Created inEthereum is a type of cryptocurrency that is an open source platform based on blockchain technology.
While tracking ownership of digital currency transactions, Ethereum blockchain also focuses on running the programming code of any decentralized application, trading grain acceptance it to be used by application developers to pay for transaction fees and bitcoin types of coins on the Ethereum network.
Ripple XRP Ripple was released in that acts as both a cryptocurrency and a digital payment network for financial transactions. Ripple allows for any type of currency to be exchanged, from USD and Bitcoin to gold and EUR and connects to banks, unlike other currencies. Ripple also differs from other types of digital currencies because its primary focus is not for person-to-person transactions, rather for moving sums of money on a larger scale.
List of cryptocurrencies
Bitcoin Cash Bitcoin Cash is a type of digital currency that was created to improve certain features of Bitcoin. Bitcoin Cash increased the size of blocks, allowing more transactions to be processed faster. Ethereum Classic Ethereum Classic is a version of the Ethereum blockchain.
It runs smart contracts on a similar decentralized platform. Smart contracts are applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interface.
Conceived by scientists at MIT, Johns Hopkins and other respected academic and scientific institutions, it was built on a decentralized blockchain.
A core feature and differentiation of Zcash is an emphasis on privacy. Stellar allows a user to send any currency they own to someone else in a different currency.
It is intended to more closely resemble the original purpose of Bitcoin, particularly bitcoin types of coins and using cryptocurrency as payments. Learn about the potential tax advantages, how to get started and more about digital currency in a self-directed retirement account with our free guide. The digital currency market may experience a high degree of volatility and clients should consult with an investment professional before any investment is made.
13 types of cryptocurrency that aren’t bitcoin
Examples of prohibited IRA investments include collectible such as artwork, stamps, rugs, antiques and gemscertain coins and life insurance. See IRA Publication for more information about prohibited investments.