Cryptocurrency Explained

Cryptocurrencies are a form of digital exchange unit that acts as an alternative to traditional domestic currencies. A very famous and widely used example of a cryptocurrency is a bitcoin. Bitcoins are units that are decentralized, which means that their changeable value is not controlled by any form of regulatory body.

How Do They Work?

Here we are going to have a look at some of the most prominent examples of cryptocurrencies available at the moment. There are many of them on the market steadily growing in usage, but each one has its own features and prime applications. Let’s go through them in order of their popularity:

1.    Bitcoin

Bitcoins are by far the most widely known and invested in cryptocurrency in the world. One coin is currently worth over $350 USD. Bitcoin’s success is really the leading factor putting cryptocurrencies on the map.

Bitcoins are used widely in online entertainment transactions, a good example is online gaming. The aspect of absolute anonymity users can have paying with bitcoins makes them perfectly suited to quick access gambling and other types of online entertainment.

2.    Litecoin

Most people would recognize litecoin as the second most established cryptocurrency available. They are not worth nearly as much as bitcoins as currently they hover at around $3 USD per unit.

These coins are believed to be built on a very similar if not the exact same technology used in bitcoin development. This has lead many to believe that the recent litecoin value crash in 2015 was linked to varying spikes and drops in bitcoin progress over the past several months. They work in very much the same way, are used in similar ways online, but the key difference is that litecoins are of course worth significantly less.

3.   Dogecoin

Dogecoin units are worth around $0.25 USD at the moment, and like the two coins above are based on bitcoin technology. The key difference with this coin was that it was not originally created to be a serious entity in the market. Dogecoin is rather famous for being initially formed as a joke. It became a player simply because of its explosive popularity and as a consequence gained a decent sized user base in a relatively short amount of time.

Out of all the coins available dogecoin target a more mainstream audience and they do it by positioning themselves as the fun and friendly digital entity in the market. They have a user friendly url, polished website layout and approachable design.

4.   Namecoin

Namecoin was originally intended to be the upgraded version of bitcoin. It is build on almost exactly the same engine with some important tweaks to the way in which data is captured by the unit. So it is identical to bitcoin in every way except its value. At the moment it stands at around $0.7 USD per coin.

Namecoin’s trustworthy origins, reasonable price point and quite extensive user base make it a fairly stable digital coin to invest in, which is something quite rare in the world of cryptocurrency.

5.   Dash

Formally known as Darkcoin, dash is a more valuable cryptocurrency currently at $4 USD per unit. For those of you that appreciate companies with “green” ambitions or “greener than most”, dash will be a high contender for you.

The idea behind this coin was to save energy.. In digital currency there is something called a mining process. This process is essentially what enables the coins to stay safe and secure for users. Its very important, but also one of the most harmful aspects to the environment. It produces a lot of waste and environmental pollution.

The maker of dash took the bitcoin concept and designed a way to build a cryptocurrency that allowed this waste to be significantly reduced. So if this kind of thing floats your boat. You may be interested in looking a lot more into dash and learning more about its favorable practices.

6.   Nxt

Interestingly Nxt does not copy the bitcoin infrastructure. Instead it is based on its own unique algorithm. This nxt system has two main advantages. The first is that it is better for the environment, and the second is that it has a higher chance of staying stable for longer.

It is worth significantly less per unit, at 0.008 USD per coin. But this is not necessarily a bad thing. It simply means that if you invest in this coin, any drops or inflation will be slight, not life altering.

How To Pick A Coin?

If you have the budget it might be worth investing in several at a time. The most important thing, however, is to ensure you pick one that suits your circumstances. Bitcoins are strong but you might not like the idea of risking such large amounts per coin. On the other hand investing totally in coins with too low a value can mean almost meaningless returns.

The rates are always changing so pick the one that suits your goals in terms of budget and time frame.