The Rise of Cryptocurrency
The Rise of Cryptocurrency
A cryptocurrency, a digital currency or crypto coins is a digital asset structured to function as a virtual medium of transaction where public coin ownership information is stored in a distributed ledger usually in a trust model. This ledger is controlled by a network of individual servers all over the world that act as intermediaries to facilitate the safe, instant, and reliable transfer of funds. The major benefit of cryptosystems is the security properties that make them immune to hacking, fraud, and other threats that may come from a volatile banking system. The system is highly secure because it requires multiple backups to each and every public coin ownership so that in case of a disaster one copy will still be functioning.
There are several different types of cryptosystems including Litecoin, Dogecoin, Nxt, Peercoin, Terracoin, and Bitshares. Unlike traditional cryptocurrencies that use Proof of Work (POW) to award new coins, a Cryptocurrency is based on a Proof of Stake (POS). The POS system is an agreement among diverse individuals that govern the distribution and sale of their stake in the market capitalization. The distribution of this stake is done through what is called “exchange pools”. The advantage of these systems compared to centralized cryptocurrencies is that it is less prone to outside influences like a centralized organization. In the event of a decentralized system being hacked, unlike the case with a POW system, most of the exchanges can self-correct without having to resort to a voting process.
Unlike other forms of Cryptocurrency like stocks and shares, which have limited supply, Cryptocurrency is traded globally and there is a high demand for it. The demand for Cryptocurrency is attributed to several factors including its high-profit potential, its high volatility, and its fast speed. The fastest and highest profit potential of any Cryptocurrency is seen in the buy and sell cryptosystem called “bitfinex”. Other Cryptocurrencies like Dash, Zcash, Monero are much slower and have lower trading volumes. Despite the large gaps in terms of volume and profit potential, all cryptosystems are volatile in nature and tend to follow the trend of the market, increasing in value and decreasing in value over short periods of time.
Like any other type of market, Cryptocurrency markets tend to exhibit “trend overlaps” with other markets. This is where two cryptosystems, such as the Dash and cash, tend to follow the same trend as the Dogecoin market. This is because both of them have built their business on the same premise – to empower ordinary people to participate in the economic activity of the country. Both Dash and Zcash are popularly traded over the Internet. There is also a close relationship between Dash and PIVX, another well-known tokenized Cryptocurrency. The two currencies almost seem to swap the role of the major players in the Cryptocurrency market, with each one taking advantage of the other’s network effect.
Most of the Cryptocurrency players are based in China, Japan, South Korea, and Hong Kong. In terms of market capitalization, four major Cryptocurrencies – ETH, BTC, BNB, and Tether. Some of the lesser-known Cryptocurrency such as SRK is worth less than a dollar each. Some of the more volatile and profitable Cryptocurrency is still relatively new on the marketplace and also face high trading costs and are thus not traded on major exchanges.
There are several forms of Cryptocurrencies that are currently being traded on major exchanges. Most of the tradable Cryptocurrencies follow the same principle of supply and demand. There are very few exceptions to this principle. One of the few exceptions is Monero, which is not actually a Cryptocurrency but rather a digital currency that was designed by a group of computer geeks. This type of Cryptocurrency is difficult to obtain and not recognized by most central banks.