Cryptocurrency

A digital payment system that is secured using cryptography. Cryptocurrencies are either decentralized or distributed over peer-to-peer (P2P) networks; there is no central authority that controls the currency supply or facilitates transactions.

Bitcoin is the original cryptocurrency and was released to the public in 2009 by unknown author Satoshi Nakamoto. The Bitcoin software uses assymetric cryptography and digital signatures to prove ownership of funds and validate transactions. Additionally, Bitcoin utilizes a SHA-256 proof-of-work system (based on Adam Back’s Hashcash scheme) to secure its public ledger, mint new currency units, and prevent double spending of currency units.

Since Bitcoin’s release and rise in popularity, hundreds of new cryptocurrencies have been released. Most are derived from Bitcoin’s open source code, but with variations such as a larger currency supply limits and different the proof-of-work hashing algorithms. Some popular altcoins include Litecoin, Dogecoin, and Peercoin, as well as Ripple, which is not based on the Bitcoin software codebase.