Cryptocurrency Definition: What is a cryptocurrency?
Usually when we talk about Bitcoin in we define it as cryptocurrency, therefore, and to provide knowledge about new concepts that are emerging in the world Bitcoin, let's define the term.
On numerous occasions, speaking of Bitcoin, the terms 'virtual currency', 'digital currency' and 'cryptocurrency' are often used interchangeably in the press. Therefore we believe it is appropriate to begin by defining these terms:
What is a virtual currency?
The European Central Bank (ECB) defined in 2012 'virtual currency' as "a kind of money unregulated, digital, broadcast and usually controlled by its developers, and used and accepted among members of a specific virtual community
What is a digital currency?
digital currency, however, is a form of virtual currency that is created and stored electronically. The cryptocurrency are a type of digital currency, but not unique.
The cryptocurrency are therefore a subset of digital coins based on cryptography.
The crypto prefix comes from the Greek word kruptos, which means hidden, secret. Cryptography is the study of methods of data encryption, mainly used to send a message safely and privately, and for security and data authentication.
Definitions cryptocurrency
Currently there is no definition of cryptocurrency in the dictionary of the Royal Academy of the Spanish Language. Oxford dictionary included the definition of its translation (cryptocurrency) last May:
"A digital currency that uses encryption techniques to regulate the generation of currency units and verify the transfer of funds, and operates independently of a central bank."
Cambridge dictionary, meanwhile, has defined these terms the word:
"A digital currency produced by a public network rather than any government that uses cryptography to ensure that payments are sent and received safely."
The digital newspaper specializing in Bitcoin Coindesk cryptocurrency defines the term as:
"A form of currency based solely on mathematics. Instead of fiat money, which is printed a cryptocurrency is produced by solving mathematical problems based on cryptography. "
Wikipedia defines it as: "A cryptocurrency is a medium of exchange that use cryptography to secure transactions and control the creation of new units."
Cryptocurrency: backed by mathematics
The cryptocurrency are backed by mathematics, which makes it can not be set by a single group or person. The cryptocurrency are not linked to the availability of physical assets, as in the case of gold.
Originally the cryptocurrency use a distributed network to allow payment P2P - peer-to-peer (peer, in Spanish), a verification system of transactions without third parties. In order to maintain this security, cryptocurrency use mathematical algorithms and a record of public accounting (called blockchain, or chain blocks, in Spanish) so, ensure that every transaction that takes place is legitimate and avoid fraud.
Most cryptocurrency are open source. This is critical because it is the only way that users can be sure that the creators will not add anything that would allow them to cheat the system. Each cryptocurrency normally has a core group of developers who can add, subtract or modify features.
Origin of cryptocurrency:
The origin of the cryptocurrency comes from Cypherpunk movement, which originated in the 80s, which advocates the widespread use of cryptography as a tool for social and political change. Chaun created in 1990. David Digicash, a centralized system of electronic money that allowed more anonymous and secure transactions. In 1997, Adam Black Hashcash proposed a test based on working to limit spam and denial of service (DoS) system. In 2009, a person or group of persons pseudonym Satoshi Nakamoto under public Bitcoin, the first fully decentralized cryptocurrency, using a chain block (blockchain in English) with working trial. Bitcoin uses the SHA-256 algorithm, a cryptographic hash function, as the scheme work test (Proof-of-Work in English).
Currently there are hundreds of cryptomonedas based on Bitcoin , but incorporate a greater or lesser number of variations from the pioneer . The cryptocurrency is further subdivided into : altcoins , meta
coins , appchains or appcoins .
The first alternative cryptocurrency that emerged after Bitcoin was Namecoin . He was born in April 2011. Soon after, in October 2011 , he was born litecoin . Bitcoin differs in that it uses as its scrypt SHA hash function to test work instead of SHA -256 . Another prominent cryptocurrency is peercoin (2012 ) was the first to use a hybrid of proof -of - work / proof- of- stake ( working trial / proof of participation).