Introduction
A cryptocurrency is a virtual currency mainly secured by cryptography; it helps to fight against double-spend or counterfeit. Many cryptocurrencies are decentralized and depend on blockchain technology (Smith & Kumar,2018). The feature of crypto-currencies is not given by central authority that issues theoretical immune to government manipulation since decentralization structure permits it to exist outside the government control and central authorities. The crypto-currency is facing a lot of criticism due to its use of illegal activities, vulnerabilities infrastructure, and exchange rate volatility, among others, but also it has been accepted by many since it has many positive qualities, which include: portability, resistance to inflation, transparency and also divisibility.
Types of Crypto-currency
Bitcoin (BTC)
Bitcoin is the most popular type of crypto-currency; it is considered to be the original crypto-currency. It’s established was in 2009 as one of the open-source software by the founder of the whitepaper, who was known as Nakamoto Satoshi. Due to blockchain technology, Bitcoin ensured all their client make transparent peer-to-peer transactions. The algorithm within the blockchain ensures users can view all the transactions securely. All the users can see all the transactions, but only the Bitcoin owner can decrypt since they have the “private key,” which is unique for every owner. When compared to a bank, Bitcoin has no central authority figure. Bitcoin users can send and receive money, which leads to anonymous transactions worldwide (Briere, Oosterlinck & Szafarz,2015).
Litecoin (LTC)
Litecoin was established in January 2011 as an alternative form of Bitcoin. Compared to various cryptocurrencies, litecoin is essential since it has open-source and is a world-paying network that is majorly decentralized; thus, it lacks a central authority. It has differences compared to Bitcoin, which includes: Litecoin transaction features are believed to be faster, coin limit of litecoin is 84 million while that of Bitcoin is 21 million, they both have different algorithms, Bitcoin is “SHA-256” while that of Litecoin is “scrypt” (Miglietti, Kubosova & Skulanova,2019).
Ethereum (ETH)
It was established in 2015; it is a crypto-currency type with an open-source platform that mainly depends on blockchain technology. Ethereum blockchain plays a crucial role in running the programming code for the various decentralized applications, allowing all the developers to pay transaction services and fees to the Ethereum network users (Dai,2020).
Bitcoin Cash
Bitcoin Cash is one of the various types. It was established to develop some features or characteristics of Bitcoin. The main reason for establishing these Bitcoin Cash was to allow more transactions to be done at once since Bitcoin was slower; thus, it is referred to us as a faster form of Bitcoin. It has been used by many people worldwide; thus, it has led to its popularity.
Ethereum Classic
Ethereum Classic is an improved form of Ethereum blockchain. It has a decentralized platform similar to that of Ethereum; thus, it runs smart contracts. Compared to Ethereum, Ethereum Classic has a valued token known as “classic ether,” whose main function is to pay users for their product or services. Many people prefer using this since it is comprehensive.
Zcash (ZEC)
Zcash was established from the original Bitcoin codebase. The pioneer of this Zcash was some scientist at MIT who was known as Johns Hopkins and others. Is the main reason for the establishment was to decentralize blockchain. The main role and core feature of Zcash are to emphasize privacy. It is not a good platform for an investor since it does not disclose the amount transacted, the sender, or the receiver, but users prefer this for their privacy (Meiklejohn,2018).
Stellar lumen (XLM)
This is an intermediary currency whose main function is to facilitate currency exchange. Stellar’s main advantage is that it allows people to transact any currency they have to people with a different currency. It was established in 2014 by Jed McCaleb as an open-source network and created native currency (Guides,2018).
Future of Crypto-currency
Research work has been carried out in crypto-currency and financial risks in recent years—it analysis the perspective of financial risk in crypto-currency. The research came with various risks that are facing CC and also measures that can be used to control by some are uncontrollable. The research has provided information that crypto-currency has a bright future since its risk has solutions. Most investors are advocating that people should join this digital currency (Mehrban & Ashraf,2019).
Conclusion
The above types of Crypto-currency hold promise regarding the transfer of currency between two people or organization, without any need of a third party, mostly the banks or credit card company, which must be trusted to do so. These transfers are considered most secure since they use public keys and private keys and incentive systems that include proof of stake and proof of work in the user’s wallet.
Reference
Briere, M., Oosterlinck, K., & Szafarz, A. (2015). Virtual currency, tangible return: Portfolio diversification with bitcoin. Journal of Asset Management, 16(6), 365-373.
Guides, T. S. (2018). Stellar Cryptocurrency Strategy–The Future of Banking.
Iqbal, S., Hussain, M., Munir, M. U., Hussain, Z., Mehrban, S., & Ashraf, M. A. (2019). Crypto-Currency: Future of FinTech. In FinTech as a Disruptive Technology for Financial Institutions (pp. 1-13). IGI Global.
Kappos, G., Yousaf, H., Maller, M., & Meiklejohn, S. (2018). An empirical analysis of anonymity in cash. In 27th {USENIX} Security Symposium ({USENIX} Security 18) (pp. 463-477).
Miglietti, C., Kubosova, Z., & Skulanova, N. (2019). Bitcoin, Litecoin, and the Euro: an annualized volatility analysis. Studies in Economics and Finance.
Smith, C., & Kumar, A. (2018). Crypto‐Currencies–An introduction to not‐so‐funny money. Journal of Economic Surveys, 32(5), 1531-1559.
Zheng, P., Zheng, Z., Wu, J., & Dai, H. N. (2020). X-block-ETH extracting and exploring blockchain data from Ethereum. IEEE Open Journal of the Computer Society, 1, 95-106:.
