Cryptocurrency Trading
While currency in one form or another has been around for millennium, up until the 21st century it has always been in a physical form. That form may be coins, bars, or even paper currency, but there has always been a physical representation of the currency we use in our daily life to buy goods and services. Everything changed in 2009, when Bitcoin was released as open source software that is used to create a digital currency. A digital currency, also known as cryptocurrency, is created through the use of specialized software and is stored only in a digital form on computers and servers throughout the world. Since then many other digital currencies have come on the scene, with even more appearing on a monthly basis. Yet Bitcoin is still the king when it comes to digital currencies – at least for the time being. Read on to learn more of the history behind digital currencies and the details behind some of the most popular digital currencies.
How it All Started.
The idea of digital currency actually came about as far back as 1982 in a research paper published by cryptographer David Chaum. He also formed the very first digital cash company called Digicash in 1990, but it was an idea ahead of its time and the company filed for bankruptcy in 1998.
The modern age of digital currencies began when Bitcoin was released as the very first decentralized digital currency. Until the release of Bitcoin, any digital currencies had been centralized, but Bitcoin changed all that. Rather than being controlled by a single source or company, Bitcoin is created and stored in a peer-to-peer networking system and relies on what is supposed to be secure cryptography for its creation through the use of digital signatures known as blockchains.
Although there have been concerns put forward regarding the creation and use of digital currencies by illegal and terrorist organizations, the movement has more recently been gaining additional support and there are now several countries and global companies who are exploring the use of blockchain technology and cryptocurrencies for use in a variety of applications.
Bitcoin – As mentioned above, Bitcoin was the first decentralized digital currency and the very first Bitcoin was mined, or created, in 2009. The actual identity of the creator of Bitcoin is unknown, but it was released under the name Satoshi Nakamoto, which is a pseudonym for the programmer or group of programmers who introduced Bitcoins. The Bitcoin system is a peer-to-peer decentralized system, with transactions occurring directly between individuals.
New Bitcoins are created through the process of mining, in which distributed computers around the world solve each block in the blockchain system. As a block is solved a new Bitcoin is added. The system adjusts the difficulty of solving blocks every 2016 blocks, making each additional Bitcoin more difficult to be mined or created. In this way Bitcoin has an artificial scarcity that has helped increase the price of Bitcoin dramatically since its inception. There will only ever be 21 million Bitcoins created, which is expected to be accomplished in 2140 or thereabouts.
The price of Bitcoin has increased dramatically since its inception, but it is also considered to be extremely volatile. In 2011 the value of one Bitcoin dropped as low as $0.30, but as of mid-2017 the value of one Bitcoin is roughly $2,400. On 13 August 2017, Bitcoin hit an all-time high of $4,200. It has been estimated that Bitcoin’s price is 7 times as volatile as the price of gold, 8 times as volatile as the S&P 500 Index and 18 times greater than the U.S. dollar.
Limitless Transaction
Cryptocurrency can be sent via internet, immediately to and from anyone, anywhere, anytime, in any amount, with very minuscule fees. You need not hire a 3rd party banker, nor wire transfer service..
Privacy
The consumer's identity is as anonymous as they want it to be. The public ledger only contains cryptic numbers known as cryptocurrency public keys for the sender and receiver of each transaction. With hierarchical deterministic (HD) technology, even those can be easily masked.
Controlled Supply
No one can change the predetermined and publicly published circulation schedule of a cryptocurrency. The government cannot arbitrarily create more cryptocurrency out of thin air and devalue it like they have the US dollar.
Ethereum is another decentralized digital currency, but is also a computing platform developed for its scripting functionality. It is quite new, having gone live on July 30, 2015 with a value of $1 per Ether coin. The value of Ethereum has recently skyrocketed, nearly hitting $400 on June 14, 2017, but has since pulled back and trades around $240 per Ethereum coin as of mid-July 2017.
One interesting fact about Ethereum is that many corporations, financial institutions and even governments have begun developing their own systems and programs based on the Ethereum protocol. This could be very positive for the currency, as broad adoption would be sure to increase the value of Ethereum. Another factor of note is that Ethereum is currently seeing double the processed transactions when compared with Bitcoin.
Unlike Bitcoin, there are no plans to cap the number of Ethereum, however there are plans in place to reduce the growth (and hence inflation) of Ethereum between 0.5% and 2.0% by changing the verification of new Ethereum blocks to a proof of stake rather than proof of work.
Anyone interested in digital currency trading should certainly keep their eye on Ethereum as it promises to be vital to the growth of the digital currency economy. and there are so many other cryptocurrencies