A cryptocurrency is a digital asset and used as a medium of exchange. It uses cryptography as the technology inside which helps to secure transactions and also controls the creation of additional currency units. Cryptocurrencies are classified as the subset of digital currencies, alternative currencies and virtual currencies.
The first decentralized cryptocurrency invented was Bitcoin in the year 2009 and after that a number of cryptocurrencies have been invented. All the cryptocurrencies except bitcoin are called altcoins which are alternatives to bitcoins. Wikipedia shows that there are more than 900 cryptocurrencies available over the web as of 11th July 2017. Bitcoin is the largest blockchain network at present which is followed by Ethereum and others.
Who are using cryptocurrencies?
A good number of companies have started making the use of cryptocurrencies. Some countries like Iceland and Spain have already adopted them to help them boost their economy. Iceland uses Auroracoin and Spain uses SpainCoin which eliminates the use of printing physical money for the purpose.
How are the prices of cryptocurrencies determined?
Actually no one but technically everyone helps in setting the prices of cryptocurrencies. The capital markets actually do that. An easier way to understand this is to consider cryptocurrencies as an asset like stock, gold or any other. The prices of these assets change based on demand and supply and similarly it goes with cryptocurrencies.
Where to use cryptocurrencies?
You can use cryptocurrencies in online transactions and also for POS i.e. Point of Sales transactions. You can also use them as an investment like you do for USD/EUR and others. Well, there are many places where you can use Bitcoins which covers a range of online stores, real life casinos, charities etc.
Hope all the information explained above had generated a lot of enthusiasm in you about the world of cryptocurrencies. The second part of this article will provide more information about cryptocurrencies.