Types of Cryptocurrencies (Essay Sample)
this sample talks about the different types of cryptocurrencies, their similarities and differencences. IT EXPLAINS CRYPTOCURENCY AS A decentralized form of money. THIS SAMPLE BROADLY TALKS OF THE TWO TYPES OF CRYPTOCURENCIES, THAT IS BTCOIN AND ETHERUM. THE SAMPLE DESCRIBES BITCOIN AS a form of digital currency that works on cryptography, and hence it is more secure than most other forms of transactions. IT FURTHER EXPLAINS THAT Bitcoin was developed as an alternative to traditional currencies to reduce corruption and the black market; its unregulated nature allows for this purpose. THE SAMPLE FURTHER EXPLAINS Ethereum AS a blockchain-based open software platform, enabling developers to build and deploy decentralized applications. THE MAIN SIMILARITY AS THE SAMPLE CLAIMS IS THAT both Bitcoin and Ethereum are decentralized forms of money that no one
can control.WHERES, THE MAIN DIFFERENCE FROM THE SAMPLE IS THAT Bitcoin was created purely as an alternative to regular money, whereas Ethereum has tokens called “ether” that can be traded or used to send messages through its blockchain.
Types of Cryptocurrencies
Cryptocurrencies
A cryptocurrency is a decentralized form of money. A decentralized system is a system in which no one can control it, and everyone has an equal say in the transactions carried out. There is no central authority that manages the cryptocurrency, and thus there are no service charges and transactions fees. Cryptocurrency is the latest trend in digital payment methods. The user base of cryptocurrencies such as Bitcoin and Ethereum is increasing exponentially worldwide.
Bitcoin
Bitcoin is the first-ever cryptocurrency created in 2009! It was created by someone under the pseudonym of Satoshi Nakamoto (Churchill, 2015). It is a form of digital currency that works on cryptography, and hence it is more secure than most other forms of transactions. Bitcoin was developed as an alternative to traditional currencies to reduce corruption and the black market; its unregulated nature allows for this purpose. Banks are no longer needed because Bitcoin acts as an online bank itself, with its users operating their money supply directly from their digital wallets. Bitcoin can also be used as an investment since it is available for trade on several online exchanges. As a store of value, users can hold their Bitcoin until the prices go up and then sells them off. Bitcoin users are not tied to any particular country: they can send and receive bitcoins anonymously.
Ethereum
Ethereum is a blockchain-based open software platform, enabling developers to build and deploy decentralized applications. Ether is the cryptocurrency used for trading and investing on the Ethereum platform, and it also pays for transaction fees and computational services on the network (Dannen, 2017). Ethereum’s creators’ key aim was to develop a platform that allows users to write smart contracts on the blockchain easily. These are then followed through without any third parties (middlemen). The Ethereum platform has since graduated from its ‘beta’ status to become a dominant player in the cryptocurrency ecosystem.
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