What are the Types of Cryptocurrency?
Bitcoin, the original cryptocurrency is based on an algorithm called SHA-256. This was originally created by the NSA to overcome a weakness in the first generation of SHA-1 algorithms. Today there are many coins using SHA-256 as well as other types of algorithms that each offer an “improvement” on Bitcoin’s code like scrypt, scrypt-jane and prime algo.
Total decentralization
Total decentralization is the main feature of most cryptocurrencies. As a result, there is no specified central point of authority. This is possible since everyone taking part in the transaction has a full copy of the required transactions. This creates a resilient network that cannot be changed or reversed by any policy in the transaction. Governments and banks are now trying to incorporate the technology, effectively aiming to create loosely centralized cryptocurrencies for their own purposes.
Cryptocurrencies have made the transfer of funds between different parties much easier and faster. The transfers are facilitated through the use of private and public keys that enhance security. Fund transfers using cryptocurrencies involve minimal processing fees. As a result, users can avoid the steep fees that most financial institutions and banks charge for wire transfers. Regardless of its benefit to the user, this form of fund transfers has a major drawback. It is virtual and does not have a central repository. Therefore, the digital cryptocurrency balance of the user can be easily wiped out whenever the computer crashes. This is why the users need to have a back-up copy of all the transactions they take part in. Additionally, the prices of cryptocurrency rely on demand and supply. Therefore, the rate at which they can be exchanged with another currency can fluctuate widely.
High level of anonymity
All Bitcoin transactions can be traced. It is one of the features of the blockchain, although tracing these transactions might be impractical in many cases. Bitcoin offers its users a degree of pseudonymity, which serves to protect the identities of the people who make transactions over its blockchain. Some newer cryptocurrencies have various mechanisms to afford their users complete anonymity. These new systems could be exploited by criminals since it involves borderless, anonymous transactions. It is difficult to report and trace criminal activities within such cryptocurrencies. Bitcoin is now widely monitored by law enforcement, making it an unlikely tool for criminal use.Fund transfer
Cryptocurrencies have made the transfer of funds between different parties much easier and faster. The transfers are facilitated through the use of private and public keys that enhance security. Fund transfers using cryptocurrencies involve minimal processing fees. As a result, users can avoid the steep fees that most financial institutions and banks charge for wire transfers. Regardless of its benefit to the user, this form of fund transfers has a major drawback. It is virtual and does not have a central repository. Therefore, the digital cryptocurrency balance of the user can be easily wiped out whenever the computer crashes. This is why the users need to have a back-up copy of all the transactions they take part in. Additionally, the prices of cryptocurrency rely on demand and supply. Therefore, the rate at which they can be exchanged with another currency can fluctuate widely.
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A great piece that sheds much needed light on some of the great theoretical/ideological debates in the contemporary crypto space. At CleanApp Foundation, we appreciate the emphasis on pragmatism, and emphasis on Blockchain/DTL/Crypto projects that offer real social utility. Looking forward to engaging more with your crew!
ReplyDeleteA great piece that sheds much needed light on some of the great theoretical/ideological debates in the contemporary crypto space. At CleanApp Foundation, we appreciate the emphasis on pragmatism, and emphasis on Blockchain/DTL/Crypto projects that offer real social utility. Looking forward to engaging more with your crew!
ReplyDeleteA great piece that sheds much needed light on some of the great theoretical/ideological debates in the contemporary crypto space. At CleanApp Foundation, we appreciate the emphasis on pragmatism, and emphasis on Blockchain/DTL/Crypto projects that offer real social utility. Looking forward to engaging more with your crew!
ReplyDeleteA great piece that sheds much needed light on some of the great theoretical/ideological debates in the contemporary crypto space. At CleanApp Foundation, we appreciate the emphasis on pragmatism, and emphasis on Blockchain/DTL/Crypto projects that offer real social utility. Looking forward to engaging more with your crew!
ReplyDelete