The cryptocurrency

jpareds (34)in #cryptocurrency • 8 years ago (edited)

Definitions of cryptocurrency

Currently there is no definition of cryptocurrency in the dictionary of the Royal Academy of the Spanish Language. The Oxford dictionary included the definition of its English translation (cryptocurrency) last May:

A digital currency that uses encryption techniques to regulate the generation of currency units and verify the transfer of funds, and that operates independently of a central bank.

The Cambridge dictionary, meanwhile, has defined with these terms the English word:

A digital currency produced by a public network instead of any government, which uses cryptography to ensure that payments are sent and received securely.

The digital newspaper specializing in Bitcoin Coindesk defines the term cryptocurrency as:

A form of currency based solely on mathematics. Instead of the fiduciary currency, which is printed, a cryptocurrency is produced by solving mathematical problems based on cryptography. "

In conclusion, a cryptocurrency is a virtual currency that is used to exchange goods and services through a system of electronic transactions without the need for an intermediary.

In 2009, a person or group of people under the pseudonym Satoshi Nakamoto public Bitcoin, the first fully decentralized cryptocurrency, using a chain of blocks (blockchain in English) with proof of work. Bitcoin uses the SHA-256 algorithm, a cryptographic hash function, as its Proof-of-Work scheme.

Currently, there are hundreds of cryptocurrencies based on Bitcoin, although they incorporate more or less variations with respect to the pioneer. The cryptocurrencies are subdivided into: altcoins, metacoins, appchains or appcoins.

The first alternative cryptocurrency that emerged after Bitcoin was Namecoin. He was born in April 2011. Soon after, in October 2011, Litecoin was born. It differs from Bitcoin in that it uses scrypt as its SHA hash function for work proof, instead of SHA-256. Another prominent cryptocurrency is Peercoin (2012), which was the first to use a proof-of-work / proof-of-stake hybrid.

Main advantages of cryptocurrencies over fiduciary money

Decentralized: Cryptocurrency is not controlled by any State, bank or financial institution.
Anonymous: Cryptocurrencies allow you to preserve your privacy when making transactions.
International: Can be used in any country in the world equally.
Sure: Your coins belong only to you and can not be intervened by anyone.
Without Intermediaries: Transactions are much faster than transactions through entities.
Voluntary Use: Its use is voluntary and not imposed by force as with traditional coins.

But without a doubt, the most important advantage of cryptocurrency over traditional currencies is that no institution or individual can control the production of money. The cryptocurrency has a controlled inflation, since it is determined in advance the amount of coins that will be created, and the speed with which this will occur.