Bitcoin, Ethereum, Ripple: What is a Cryptocurrency?

Bitcoin, Ethereum, Ripple: What is a Cryptocurrency?
Cryptocurrencies have been in the news a lot lately. You may have heard of Bitcoin, Ethereum, and Ripple, but what are they? Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and to control the creation of new units. Cryptocurrencies are decentralized, which means they are not subject to government or financial institution control. Bitcoin, Ethereum, and Ripple are all examples of cryptocurrencies. In this blog post, we will explore how cryptocurrencies work, the benefits and risks of investing in cryptocurrencies, and whether or not they are a good investment for you.
Bitcoin, Ethereum, Ripple: What...
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Cryptocurrencies have been in the news a lot lately. You may have heard of Bitcoin, Ethereum, and Ripple, but what are they? Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and to control the creation of new units. Cryptocurrencies are decentralized, which means they are not subject to government or financial institution control. Bitcoin, Ethereum, and Ripple are all examples of cryptocurrencies. In this blog post, we will explore how cryptocurrencies work, the benefits and risks of investing in cryptocurrencies, and whether or not they are a good investment for you.
Bitcoin, Ethereum, Ripple: What is a Cryptocurrency?
What is Bitcoin?
Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto. Transactions are verified by network nodes through cryptography and recorded in a public dispersed ledger called a blockchain. Bitcoin is unique in that there are a finite number of them: 21 million.
Bitcoins are created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.
What is Ethereum?
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third party interference.
These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property. This enables developers to create markets, store registries of debts or promises, move funds in accordance with instructions given long in the past (like a will or a futures contract) and many other things that have not been invented yet, all without a middle man or counterparty risk.
The project was bootstrapped via an ether presale in August 2014 by fans all around the world. It is developed by the Ethereum Foundation, a Swiss non-profit, with contributions from great minds across the globe.
What is Ripple?
Ripple is both a cryptocurrency and an open payment network within which that currency operates. The native currency of the Ripple network is also called XRP.
The main idea behind Ripple is to make it easy for people to send money to each other no matter where they are or what currency they use. To do this, Ripple has created its own digital currency (XRP) that can be used to make payments anywhere in the world almost instantly and at very low costs.
Ripple can be used to make both real-world and digital payments. For example, you could use Ripple to pay for a cup of coffee with your credit card, or you could use it to pay for a digital purchase like an eBook.
How do Cryptocurrencies Work?
How are Cryptocurrencies Created?
Cryptocurrencies are created through a process called “mining.” Mining is a process of verifying transactions and adding them to the public ledger, known as the blockchain. In order to be verified, transactions must be packed into blocks and each block must be hashed. The hashing process takes a lot of computational power, which is why miners are rewarded with cryptocurrency for their efforts.
Bitcoin, for example, is mined by solving complex mathematical problems. Ethereum is mined using a proof-of-work algorithm. Ripple, on the other hand, doesn’t require mining since all of its coins were pre-mined.
How do Cryptocurrencies Gain Value?
Cryptocurrencies gain value in a number of ways. First, they can be used to purchase goods and services just like any other currency. Second, they can be traded on exchanges for other currencies or for traditional assets like gold and silver. Third, they can be held as an...