You’ve heard of cryptocurrency…but what is it?

From Issue 5

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Unless you live under a rock you have surely heard the word cryptocurrency, but I doubt you really understand what they are. In short a cryptocurrency is a digital asset designed to work as a medium of exchange that uses cryptography to control its creation and management, rather than relying on central authorities like a government. First let’s look at the different kinds of currencies and their uses. I am going to outline the three largest coins (by market cap).

Bitcoin (BTC) is the first and largest cryptocurrency. It was launched in January of 2009. Despite currently being the most expensive cryptocurrency, it was not always so pricy. From January 2009 to March 2010 bitcoin was literally worthless. It was not until late 2010 when lead developers established security protocols that would finally help the currency grow to be worth $.003 for 1 BTC. The first ever purchase with bitcoin was made in 2010 by a man who wanted to buy a pizza. He spent 10,000 BTC to buy a single pizza, which at the beginning of 2018 would be worth $151,900,000. Bitcoin can be obtained by purchasing with a credit/debit card or by “mining” it. Mining is the act of using a computer to solve complicated math equations. Every time an equation is solved the bitcoin network awards the miner with x amount of bitcoin. In the early days of bitcoin people could mine hundreds of thousands of coins in only a few months. Today it would take over a year to mine a single coin. The slow mining rates and the high prices of power (takes a lot of money to power a large computer 24/7) have caused a decrease in mining popularity over the past year.

Ethereum (ETH) is the second largest cryptocurrency by market cap. It has had a similar history to Bitcoin with both of the coins being pioneers in the crypto industry. Ethereum came after Bitcoin, but despite this,  it has a few features which give it an advantage over its older sibling. Ethereum is a decentralized open platform that runs smart contracts. Ethereum was launched in 2015 and had been much talked about before its launch. Ethereum unlike Bitcoin creates a solution using blockchain technologies for paper contracts. Ethereum’s network is also significantly faster than Bitcoin’s, but it still is not the fastest.

XRP or Ripple is the third largest cryptocurrency by market cap it was launched in 2012 by the company Ripple and had one purpose: to be the fastest cryptocurrency on the market, and that it is. XRP takes only two seconds to send between wallets, Ethereum takes 2 minutes, and Bitcoin takes 3 hours. Ripple wanted to created a currency to replace the way people wire money. If you have ever wired money you’d know it takes multiple days to clear. Ripple is the business that issues the currency XRP as a solution to this problem. Since it only takes two seconds to send XRP, Ripple sells their services to banks and credit card processing companies to transfer money from accounts faster than any other method. XRP is the most unique cryptocurrency because it has a company that actually backs the currency (Ripple) but is also a decentralized cryptocurrency with a scalable network. For these reasons XRP has grown to be the size it is today.