Types of Cryptocurrency and How They Work

Cryptocurrency is the term used for naming the types of currencies and methods of payment that are mostly used today. Experts see the potential of cryptocurrency of changing economic situation of every country and especially the business world. Today, some governments are already trying to deal with cryptocurrency wherein they try to learn how to use the currency for their benefit.
There are several types of cryptocurrency that are widely used in different parts of the world. It’s important that you are familiar with them so you know exactly how they work. Below is a list of the most common kinds of cryptocurrency.

 Bitcoin

Among the types of cryptocurrencies, this must be the most common one. Bitcoin is an original creation of Satoshi Nakamoto, a mysterious man who creatively and knowledgeably the currency. Bitcoin is a versatile currency that you can use to purchase items through a local or electronic transaction. Even when you’re a first-time user, you can easily learn to use this currency without knowledge of its technical details. Once installed on your computer or phone, it will generate a Bitcoin address automatically. Now, it’s ready for use in all your transactions.

 Peercoin

Developed by software developers Sunny King and Scott Nadal, Peercoin became the pioneer cryptocurrency that was able to utilize the technique combining proof-of-stake and proof-of-work. Using the hashing process, coins are mined. Take note that when hashing difficulty increases, every user gets a reward of coins through the proof-of-stake algorithm requiring the person only minimal energy for acquiring the blocks.

 Ethereum

Considered as the decentralized computing platform, Ethereum offers great features particularly contract functionality. This cryptocurrency makes use of EVM or Ethereum Virtual Machine that is a decentralized machine executing peer-to-peer contracts with the use of ether.

 Primecoin

Another great achievement of Sunny King is Primecoin. This time, the proof-of-work is established using prime numbers. Primecoin is built on the framework of Bitcoin that involves long and distinctive prime numbers. This way, there’s great security ease on mining on the network.

 Litecoin

Just like Ethereum, Litecoin is also a peer-to-peer cryptocurrency that has been released under the category of MIT/X11 license. In fact, this one is also almost the same as bitcoin. Using Litecoin should be in accordance with an open-source protocol. Transfer of money is also done through the protocol.

 Chinacoin

A Litecoin-based currency, the China coin is one of the most commonly used cryptocurrencies that comes up with a script password-based key. Basically, the key has a derivation function. Once you use a China coin, you can expect 88 coins per block that are generated every 60 seconds.

Using cryptocurrency as your mode of payment can make a big difference in your transactions. You can use any of these currencies depending on your need. Whatever is compatible and suitable to your needs, then it’s the best option for cryptocurrency for you.

Posted on July 4, 2017 by yaki