Cryptocurrency

From Conservapedia
Jump to: navigation, search

Cryptocurrency is an alternate form of currency which, like most modern money, has no actual value. It is not backed by gold or any other physical thing—instead, it is backed by the investment of others. Unbacked money is only worth the value people put into it, and cryptocurrency was designed with this in mind. Most of the kinds are based on the proof-of-work model, which means that the value of the currency is based on the work others put into it. This work is done in the form of mining, which is the act of generating new blocks of crypocurrency. Only a few are based on the proof-of-stake model, in which it is earned by investing the currency itself.

History

On the evening of January 3, 2009, a person going by the name of Satoshi Nakamoto released Bitcoin, the first-ever cryptocurrency. This Bitcoin system which had been single-handedly created by him was composed in all of about thirty-one thousand lines of code.[1] The new Bitcoin met with some success, and before long there were other cryptocurrencies being created. Many of these use a similar base to that of Bitcoin, including LiteCoin.

How it works

Proof-of-Work

In this system, an individual runs a "miner" program which works through complex calculations to eventually generate a large block of seeming gibberish—this block is an alt-coin. This block is saved to the user's "wallet," that is, a place of storage for this cryptocurrency. When the user is ready to spend this currency, it is sent to another user's wallet (using a wallet address) through a peer-to-peer system.[2][3]

Proof-of-Stake

In this system, an individual buys some of this cryptocurrency which has been originally generated. The user then "stakes" some or all of this as an investment.[4] As time passes, the individual receives a small amount of interest from the system. BlackCoin and Peercoin are the best known proof-of-stake cryptocurrencies. Staking BlackCoin earns about 1% per year.[3]

Cryptocurrencies

The following are some currencies in the ever-growing list of cryptocurrencies.

References

External links