What are the main cryptocurrencies? What are the main characteristics of cryptocurrency? Cryptocurrency uses encryption technology to ensure transaction security and stipulate the creation of other units. Bitcoin, the most original and famous cryptocurrency by far, was launched in January 2009. Today, more than 1000 cryptocurrencies can be traded online.

What are the main cryptocurrencies?

Bitcoin

Bitcoin is considered the most original and famous cryptocurrency. Nakamoto Cong was founded in 2009 as a person or a group of people in the name of Nakamoto Cong. It can be said that its characteristics are more like commodities than traditional currency. This is reflected in the fact that it is now used more as a form of investment than as a means of payment. As of December 2017, there were about 16.7 million bitcoins (a limited number may be 21 million) in circulation. Traders can buy Bitcoin through exchanges, or speculate on its price trend through contracts for differences and spread trading.

Ethereum

Ether is relatively new in cryptocurrency. It was launched in 2015 and became the second largest digital currency at the time of writing this article. It operates in a similar way to the Bitcoin network, allowing people to send and receive tokens representing value through an open network. Tokens, called Ether, are used for online payments. However, the main use of Ether is as a smart contract rather than as a payment method. Smart contracts are code scripts that can be deployed in the Ether blockchain. The restrictions on Ethercoin are also slightly different from Bitcoin. The issuance limit is 18 million ether coins per year, which is equivalent to 25% of the initial supply. Therefore, although the absolute circulation is fixed, the relative inflation rate is declining every year.

Bitcoin cash

Bitcoin cash (BCH) is a cryptocurrency and payment network generated by Bitcoin hard fork in December 2017. When the digital cryptocurrency community diverges, a hard bifurcation occurs. Generally, the divergence points are mainly related to the software updates used in the network. However, for Bitcoin cash, the divergence points that generate its hard forks mainly come from a proposal on whether to increase the block size limit. After the bifurcation, the blockchain is divided into two parts, and the miners and the broad community decide which digital cryptocurrency to choose. After the emergence of Bitcoin hard forks, each Bitcoin held is generally allocated a Bitcoin cash (but some exchanges do not recognize Bitcoin cash).

Litecoin

LTC is a peer-to-peer digital cryptocurrency created by Charlie Lee (formerly an employee of Google) in 2011. Lite coin is a "copycat coin" derived from Bitcoin in the early days, which was originally produced for smaller transactions than Bitcoin. Technically, Litcoin is almost the same as Bitcoin, but it has some significant differences and improvements. For example, the processing speed of Lite Coin is 4 times faster than that of Lite Coin. The mining technology of Lite Coin is more demanding, but the total amount is much higher - currently set at 84 million, four times the number of Bitcoin.

ripple

Swiss currency is a network that can trade any currency (including fiat currency and digital cryptocurrency) globally. Ripple aims to ensure safe, fast and low-cost transactions within the network, without the risk of fraud or refund. Ripple is much faster than Bitcoin - it takes only a few seconds to complete the transaction. The lowest transaction cost is also much lower, which is one of the reasons why more and more banks choose Ripple for settlement. Raytheon also refers to the digital cryptocurrency of Raytheon used on the network.

What are the main characteristics of cryptocurrency?

There are a number of key principles governing the use, conversion, and trading of cryptocurrencies.

Encryption technology

Cryptocurrencies use advanced encryption techniques in many ways. Cryptography evolved from the demand for secure communication methods in World War II, aiming to convert readable information into encrypted code. Now cryptography has come a long way. In today's numbers, it is mainly based on computer science and mathematical theory. It also draws on communication science, physics and electronic engineering.

The two main elements of cryptography are applicable to cryptocurrency hash algorithm and digital signature:

Hash algorithm verifies data integrity, maintains blockchain structure and encodes account addresses and transactions of personnel. It also creates encryption challenges that make block mining possible.

Digital signatures allow individuals to prove that they have an encrypted piece of information without disclosing it. For cryptocurrencies, this technology is used to sign currency transactions. It proves to the network that the account owner has agreed to the transaction.

Blockchain technology

Blockchain is a decentralized public ledger or cryptocurrency transaction list. The completed block consists of the latest transactions, which are recorded and added to the blockchain. They are stored in chronological order as open, permanent, and verifiable records. The point-to-point network of market participants manages the blockchain, and they follow the setting protocol used to verify new blocks. Each "node" or computer connected to the network will automatically download a copy of the blockchain. This allows everyone to track transactions without having to keep central records.

Blockchain technology has created a record that cannot be changed without the consent of the rest of the block. The blockchain concept is attributed to Nakamoto Cong, the founder of Bitcoin. This concept has inspired a series of applications other than digital cash and currency.  

Block mining

Block mining is the process of adding new transaction records to the blockchain as blocks. In this process - using Bitcoin as an example - new Bitcoin will be generated, increasing the total number of tokens in circulation. Mining requires a specific software for solving mathematical problems, which verifies that the legal transactions constituting a block are a block. Add these blocks to the public ledger (blockchain) approximately every 10 minutes. When the software solves the transaction, the miners will get a certain amount of Bitcoin. The faster the miners' hardware can handle mathematical problems, the greater the possibility of verifying transactions and obtaining Bitcoin rewards.

In general, the above content introduces in detail what the main cryptocurrencies are and what the main features of cryptocurrencies are. I believe you will understand it after reading it. However, cryptocurrencies are usually unregulated and high-risk speculative investments, so you should fully understand before investing in cryptocurrencies. After all, investment is accompanied by risks.