CRPTOCURRENCY

CRPTOCURRENCY

Subject : Economy

Context : The price of the famously volatile digital currency fell nearly 30% at one point after the China Banking Association warned member banks of the risks associated with digital currencies. The decline narrowed to below 10% in the afternoon, but Bitcoin had still lost about $70 billion in market value in 24 hours.

Concept :

• A cryptocurrency or crypto, is a virtual currency secured by cryptography. It is designed to work as a medium of exchange, where individual ownership records are stored in a computerised database.
• The defining trait of a cryptocurrency is that they are not issued by the government agency of any country making them immune against any interference and manipulation from them.

As per computer experts, any system that falls under the category of cryptocurrency must meet the following requirements.:

• Absence of any centralised authority and is maintained through distributed networks
• The system maintains records of cryptocurrency units and who owns them
• The system decides whether new units can be created and in case it does, decided the origin and the ownership terms
• Ownership of cryptocurrency units can be proved exclusively cryptographically.
• The system allows transactions to be performed in which ownership of the cryptographic units is changed.

Types of Cryptocurrency

• The first type of crypto currency was Bitcoin, which to this day remains the most-used, valuable and popular. Along with Bitcoin, other alternative cryptocurrencies with varying degrees of functions and specifications have been created. Some are iterations of bitcoin while others have been created from the ground up
• Bitcoin was launched in 2009 by an individual or group known by the pseudonym “Satoshi Nakamoto. As of March 2021, there were over 18.6 million bitcoins in circulation with a total market cap of around $927 billion.

The competing cryptocurrencies that were created as a result of Bitcoin’s success are known as altcoins. Some of the well known altcoins are as follows:

• Litecoin
• Peercoin
• Namecoin
• Ethereum
• Cardana