What are Crypto Currencies?

What are Crypto Currencies?
21 February 2018    Lisa Clark    0 comments

A digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
But what does that exactly mean? I’m sure you have heard the term being mentioned in the media lately, most of the stories are of people making (and in some case losing) a lot of money. Take for example the Winklevoss twins, who are probably best known for the role in the movie ‘The Social Network’, you see they say that back in their Uni days Mark Zuckerberg stole their idea which has since become the most well-known Social Media hub the world has ever known, Facebook. They sued and we’re eventually awarded $65 million dollars for their troubles, they used the money from that settlement to buy into the little known at the time currency, bitcoin and when bitcoin began to rise rapidly they became overnight billionaires. But as the saying goes what goes up must come down and in just the past month alone they have seen their fortunes drop 37 per cent.
I mean, they’re by no means doing it tough but that’s a lot of money to lose overnight. I’m guessing your next question is how do we all become billionaires using bitcoin? Well, read on!
The main three cryptocurrencies are as follows; Ripple, Bitcoin and Litecoin. You can see from the below table that they are subject to massive amounts of potential price volatility in both directions. Meaning you can make some massive gains in the currency and lose it quite quickly as well.

Cryptocurrency Price in U.S Dollars as of Dec. 31, 2017 Gain in 2017
Ripple $1.96 35,000%
Bitcoin $967.00 930%*
Litecoin $224 5,300%

The above three cryptocurrencies have gained substantial notoriety because of their strong returns over the past year, the market works differently for each one though and each one holds a different slice of the cryptocurrency pie.

Ripple aims at the financial industry and has recently became the second most valuable cryptocurrency, that upsurge reflects Ripple's goal to apply blockchain technology to the financial industry. Ripple's biggest advantage is that despite its huge gains in 2017, it has by far the lowest dollar price among major cryptocurrencies. That will appeal to those just getting into the space, who will hope that Ripple's price could eventually reach the same lofty levels as bitcoin.
Leading that charge has been the most popular, and valuable, virtual currency in the world, bitcoin. Bitcoin's market cap recently stood at $166 billion, putting it ahead of Wall Street darlings like General Electric and Walt Disney.
Right now, there's a lot of excitement surrounding blockchain, the digital open-source transaction ledger that underlies most virtual currencies, including bitcoin. Blockchain logs all transactions without the need for a financial intermediary, like a bank, and it can do so in a safe and secure manner. Since these networks are open source, altering logged data is practically impossible, making blockchain especially secure and particularly appealing to the financial-services industry. Bitcoin is also benefiting from its growing acceptance as a form of payment, long story short, the more merchants that give bitcoin a shot, the more validity there is to it.
Liecoin also shares roots with bitcoin, as the two cryptocurrencies share the common goal of facilitating payments, and they both have limited number of outstanding coins available for purchase. Perhaps most importantly, Litecoin has an actual person who stands behind the cryptocurrency. Charlie Lee created the project that led to Litecoin's creation, and his work as a strong advocate for the cryptocurrency lends an authenticity to Litecoin that bitcoin lacks. Lower prices also make Litecoin more accessible in whole-coin quantities than bitcoin, which could attract investors seeking bigger gains that bitcoin.
Call me old fashioned, but if it’s not in my wallet or in my bank I’m just not buying it, needless to say that might be why the Winklevoss twins are worth about 1.3 billion dollars and I have $5,000 in my savings account…

Image credit: Photo by Make someones day from Pexels
Lisa.jpg Bondi-based freelance journalist, blogger & #girlboss, Lisa Clark, has an acute appreciation for travel, fashion and photography. Through this lifestyle, Lisa creates beautiful and inspiring content across her Instagram @iamlisaclark and her blog www.lisaclark.com.
When she isn't writing for Skillsroad you can find her at the beach with her dog Levi or working on her Social Media Company We Are The Hunted, shooting (and eating) food for her hospitality clients.


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