The concept of digital currencies is something that has been around for decades, but it wasn't until 2009 when Bitcoin was released that the first decentralized cryptocurrency came into this world.
Bitcoin became recognized as a legitimate currency, but it wasn't
without its issues. It was recognized by some as an anonymous payment method
because transactions are recorded on a public ledger known as Blockchain, which
means funds can be traced back to the original owner if their identities are
linked to the addresses used in transactions.
However, on crypto news, other users recognized Bitcoin's flaws and created other
cryptocurrencies that ultimately solved these issues. This led to hundreds of
different types of cryptocurrencies such as Litecoin, Ethereum and others being
created - each adhering to certain rules algorithms and values assigned to
coins.
This article will give you a brief background of the major cryptocurrencies to exist and what they do.
Bitcoin:
Bitcoin, which is also referred to as BTC, was the first decentralized
cryptocurrency that launched in 2009. Even though it continues to be one of the
most popular forms of crypto, there are a lot of issues with its network such
as slow transaction times and high fees compared to other coins.
Many investors continue holding their Bitcoin despite these setbacks
because it is considered "digital gold" because people believe that
since no more than 21 million Bitcoins can ever be mined from its algorithm;
this makes it a deflationary asset - meaning its value should theoretically
increase over time due to its rarity.
Litecoin:
In 2011, Litecoin was created as a "harder" alternative to Bitcoin with a different algorithm that allowed for faster processing times and lower fees. It is also a deflationary asset because there will only be a total of 84 million Litecoins ever created, which means it should hold value better than currencies whose infrastructures have no cap on the number of coins that can exist at any time.
Ethereum:
In late 2013, Ethereum came onto the scene as Ether - ETH for short -
became the second largest cryptocurrency in terms of market capitalization. It
operates similarly to Bitcoin but allows users to create smart contracts using
its built-in programming language called Solidarity.
Ether is also different from the other digital currencies because it
isn't strictly a cryptocurrency. The Ethereum network runs on Ether, but also
acts as fuel for decentralized platforms running on its blockchain (also known
as DApps). Users create these platforms using Ether to fund them and pay users
who complete their work for them through smart contracts.
