The term digital currency is becoming more and more popular, with people using it to replace physical currencies. They can then use a public ledger where transactions can be safely recorded without the need for a central bank or other regulatory body. With no central authority, these decentralized monetary systems are mathematically managed and maintained by the community using blockchain technology. A couple of coins in particular that have been receiving a lot of interest include Bitcoin and Ethereum.
1) Bitcoin – the first Cryptocurrency
Bitcoin is the first and the most popular digital currency. It was created in 2009 by a developer (or group of developers) using the alias Satoshi Nakamoto.
What is it?
Bitcoin is an online currency that allows people to buy goods and services and exchange money without involving banks, credit card issuers, or other third parties. To start using bitcoins, a user can go to an online cryptocurrency exchange, where a free bitcoin wallet can be created. Transactions are made with no middlemen – meaning, no banks!
How does it work?
Bitcoin works on a technology called blockchain, which is essentially a public ledger that keeps track of all transactions that take place in real time. To keep up to date with the price, you can visit an online Bitcoin price chart at OKX.
2) Ethereum – a smarter coin
Ethereum is a cryptocurrency that utilizes blockchain technology. It was created with a different philosophy than Bitcoin, and its purpose is to be more flexible and less limiting.
What is it?
Ethereum is an open-source, decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interference. Ethereum uses ether, a form of cryptocurrency native to the Ethereum network. Developers using Ethereum state that this allows anyone to both write and deploy smart contracts, which can be thought of as decentralized apps with certain security features.
3) Dogecoin – The fun coin
Dogecoin is a fun, new way to use and trade cryptocurrencies. Dogecoin was introduced in December 2013 as a joke cryptocurrency based on the popular Doge meme featuring a dog. Anyone can create new Dogecoins (or “XDG”) out of thin air, but they are limited to 100 billion coins total.
What is it?
Dogecoin was designed to help make annoying tasks on the internet easier. It was created by Billy Markus from Portland, Oregon, and Jackson Palmer (both members of the bitcoin group known as the Shiba Inu team). This coin uses Scrypt technology in an attempt to improve mining security and also provide more fairness in mining.
4) Litecoin – the faster coin
Litecoin is an open-source, global payment network that was created in 2011 by Charlie Lee, a former Google engineer. It is similar to Bitcoin in that it uses blockchain technology, but it has a faster transaction processing time and can handle higher volumes.
What is it?
Litecoin is based on Bitcoin. It differs from Bitcoin mainly in the limit of its mining power and its intended use. Litecoin can be used by merchants to pay for goods or services and also to exchange value between each other.
All of these digital currencies were created to provide solutions to the problems of centralized currencies. Now that we have a better understanding of how this technology works and which coins are the most popular, it is up to you to decide which coin or what method works best for your needs. If one thing is certain, people will continue flocking to digital currency as it continues to evolve in ways no one could have imagined.