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What Is Cryptocurrency?
When Satoshi Nakamoto launched the Bitcoin protocol in January 2009, the first globally viable cryptocurrency had arrived.
Cryptocurrency is a relatively new type of currency that works in a completely different way than the traditional currency that we all use on a daily basis. The most basic difference is that it is exclusively a virtual currency, which means that there are no physical cryptocurrency coins or notes that you can keep in your back pocket.
It is also issued, or created, in a unique way. Rather than being produced by a central bank or government, like US dollars, euros, and other fiat currencies, new cryptocurrency units typically enter circulation through a technological process that involves volunteers from around the world using their computers.
This is why cryptocurrency is often described as “decentralized.” Cryptocurrencies are generally not controlled or operated by a single entity in a single country. It takes a whole network of volunteers about the world to secure and confirm transactions made with cryptocurrencies.
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Types of cryptocurrencies
Bitcoin was the first of many cryptocurrencies that exist today. After its introduction in 2009, developers began creating other cryptocurrency variations based on the technology that powers the Bitcoin network. In most cases, cryptocurrencies were designed to improve on the standards set by Bitcoin. This is why other cryptocurrencies that came after bitcoin are together called “altcoins” from the phrase “alternatives to bitcoin.” The most prominent examples are:
- Bitcoin money
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