Cryptocurrency – these are digital assets, which is not expressed in paper money and exists only in electronic form. It is a mathematical code, protected by a special cryptographic technology, Signature. Hence the name of this digital money..
After the publication of the article in 2011 year in Forbes magazine about the Bitcoin "Crypto currency" system (cryptographic currency), entrenched term "Cryptocurrency". Cryptocurrency payments in their economic conditions and consequences are more similar to cash payments., than non-cash payments, despite, that cryptocurrencies are developed primarily for online purchases. At the heart of any cryptocurrency payment system is Blockchain technology, which is an anonymous decentralized way of storing information about operations and deals.
To 2013 year software of all cryptocurrencies, except Ripple, was based on the open source code of the "Bitcoin" system. Over time, other platforms began to appear., supporting not only cryptocurrency, but also different infrastructure – exchange trading, Messengers, shops, etc..
To date, there is 3 type of cryptocurrency: bitcoin, altcoins and tokens.
IN 2008 year anonymous developer, known as Satoshi Nakamoto, published a white paper, describing the first electronic money, independent of the government or banks – Bitcoin (BTC). Unlike traditional online payments and money transfers, it has a lower transaction fee, and it is completely decentralized.
There are no physical Bitcoins, and there are only accounts, stored in the blockchain. How Bitcoin is accepted as a means of payment for goods and services, same, like fiat currency.
In the beginning, Bitcoin was the only cryptocurrency, but later other projects began to appear – altcoins, i.e. alternative coins. Etherium, Lightcoin, Ripple, Bitcoin Cash or Monero were created on their native blockchains, and they all sought to overcome a number of challenges., inherent in Bitcoin: increase in transaction speed, use of blockchain technology in other areas, strengthening of anonymity, etc..
About the third type of cryptocurrency, read the article "Types of cryptocurrency". Part 2».