Developers have been working on cryptocurrencies for a few decades already but none of them seemed to manage to create a fully-functional cryptocurrency for the whole world to use.
The first fully operational cryptocurrency was Bitcoin, which was introduced in 2008 by an unknown entity called “Satoshi Nakamoto”. No one really knows who this person or group of persons is, even though there are lots of speculations.
In his whitepaper, “Satoshi Nakamoto” describes Bitcoin as a peer-to-peer electronic cash system.
“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
Bitcoin makes use of a so-called “blockchain”, which is a globally distributed ledger that runs on thousands or even millions of computers at the same time, and is always up-to-date.
All of these computers (called nodes) work together to validate transactions and to create consensus amongst all the nodes in the network. They also create new blocks of transactions in the network which happens every 10 minutes by a process called “mining”.
Cryptocurrencies are revolutionary because are anyone with internet access can contribute to their network, buy and sell them, they are safe and extremely fast to use, their costs are often very low, and the maximum amount of coins can be limited.
Bitcoin will have exactly 21 million coins in circulation at maximum for example!
On the website CoinMarketCap you can find a detailed list of all cryptocurrencies, information about their fundamentals, and where they can be bought and sold. The amount of cryptocurrencies is truly endless and is growing every single day.
Cryptocurrencies are being used by millions of people and businesses worldwide already, but they will have to become adopted even more in the decades to come. They can already be used to buy goods and services from many companies!
There are five different cryptocurrencies:
- Payment coins, which are primarily used for payments;
- Utility coins, which offer many more possibilities than only payments;
- Stablecoins, which are pegged to $1;
- Non-Fungible Tokens, which are unique tokens representing ownership;
- Central Bank Digital Currencies, which are issued by Central Banks;
There are many more actually like privacy coins, meme coins and DeFi coins, all of these can also be classified in the five categories listed above.
A new development in the cryptocurrency world are index funds for cryptocurrencies, which hold all of the top 20 cryptocurrencies for example. Excluding stablecoins!
We have a lot of knowledge about cryptocurrencies and we will write more specific blog articles about them soon, all of which we will post here.
We highly recommend the following exchanges: