Bitcoin was the maiden cryptocurrency that emerged in 2009 and even after a span of a decade it is still going strong. The amazing thing to note is that bitcoin still remains the undisputed leader among the cluster of over 1500 contemporaries that have emerged after its birth.
Almost all of them have the same basic underpinning: a technological marvel known as “blockchain” which is a shared public record of transactions devised to create and track a new type of digital token. This digital token can only be created and shared according to the agreed-upon rules of the network.
But there are numerous variations visible in the cryptocurrency ecosystem which happened due to the different kinds of purpose they intend to serve address Cryptocurrencies, such as Litecoin or Dogecoin, fulfilled the same purpose as bitcoin i.e. to build a new digital currency with some tweaks as in making transactions faster, for instance, or ensuring a basic level of inflation. Others, such as Ethereum or Bat, utilises the same principle but applies it to distinct purposes other than storing value e.g. in the case of cloud computing or digital advertising.
If bitcoin is not any tangible thing then what you really have when you own a bitcoin is the collective agreement of every other computer on the bitcoin network to the fact that your bitcoin was legitimately created by a bitcoin “miner” and the ownership was passed on to you through a series of legitimate transactions.
If you want to own some bitcoin, there are exactly two options: either become a miner investing a lot of money in computers and electricity bills or simply purchase it from someone else using fiat currencies like through a bitcoin exchange such as Coinbase or bitcoin ATMs or from any real peer to peer exchange.
The most quirky thing about bitcoin is that only the 21 million bitcoin will ever be mined and no more can exist beyond that limit. Another interesting thing that we came across in this ecosystem is that if you disagree with the network’s protocol a split from the network can easily be initiated which would creating a different version of bitcoin. This is referred to as a “fork” and it has already happened multiple times in the past.
Building a cryptocurrency involves turning a global network of computers into a decentralised platform for the storage and processing of data. In effect it resembles a giant hive-mind computer system that holds infinite possibilities. E.g. we’ve already seen proposals for YouTube clones, collectible card games and digital advertising exchanges to be built on top of cryptocurrencies.
In practice, however, the available use cases are rather more limited. Bitcoin can be used as a payment structure for a few online transactions, and even fewer real-world ones. Other cryptocurrencies are even more juvenile in that reference. So the hysteria is focused more on what it could become than what it actually is.
The following infographic on 33 Cryptocurrencies Described in Four Words or Less is developed by our friends at Mrbtc.org, checkout the infographic and let us know your thoughts.