CRYPTO-CURRENCY

With all the excitement surrounding crypto-currency, many companies are offering opportunities labeled as crypto-currency. So what exactly is a real crypto-currency and what is not? 

Digital Currency

Digital Currency or Digital Money  is an Internet based  medium of exchange that is similar to physical currency, except  that it allows for instantaneous transactions and borderless transfer of - ownership. Both virtual currencies and crypto-currencies are types of digital currency. Like traditional money, these currencies may be used to buy physical goods and services but could also be restricted to  certain communities  like online gaming, social networks, or  pyramid schemes.

Digital currencies such as bitcoin and GCRcoin are known as “decentralized digital currencies ”with no center of control over the money supply.

Virtual Currency

Virtual Currency is a form of digital currency that is controlled by a centralized company.

Virtual currencies have been around for a long time. Virtual currency is purchased with real money, but is restricted in use to a private community. The Amazon Coin is a good example of a virtual currency that only has value at Amazon. Amazon is free to establish and change the value of an Amazon Coin at its whim.

A good example of virtual currency in the real world is poker chips issued by a specific casino for real money, but usable only at that casino.

Some companies are claiming to offer crypto-currency when in fact they just have a private virtual currency.

So what is real crypto-currency?

 

Crypto-Currency

Crypto-Currency is a revolutionary money system that can protect consumer anonymity and prevent government intrusion. It successfully addresses world-wide concerns with the current financial system’s inefficiencies, exorbitant fees, uncontrolled inflation and big-brother oversights.

Crypto-currency is owned by the people and no government or company can control it.

It is public and protected by the network of owners to verify every transaction.

Crypto-Currency is the people’s money, a true financial democracy.

Crypto-currency may also be defined as a medium of exchange like regular currencies such as USD, but designed for the purpose of exchanging digital information through a process made possible by certain principles of cryptography. Cryptography is used to secure the transactions and to control the creation of new coins. The first crypto-currency to be created was Bitcoin back in 2009. Today there are hundreds of other crypto-currencies, often referred to as Altcoins, e.g. GCRcoin.



Cryptocurrencies typically feature decentralized control (as opposed to a centralized electronic money system, such as PayPal) and a public ledger (such as bitcoin's block chain) which records transactions. Unlike centralized banking, like the Federal Reserve System, where governments control the value of a currency like USD through the process of printing fiat money, government has no control over crypto-currencies as they are fully decentralized. Put another way, crypto-currency is electricity converted into lines of code with monetary value. In the simplest of forms, crypto-currency is digital currency.

Most crypto-currencies are designed to decrease in production over time like Bitcoin, which creates a market cap on them. That's different from traditional currencies where financial institutions can always create more, hence inflation. Bitcoin will never have more than 21 million coins in circulation. The technical system on which all crypto-currencies are based on was created by Satoshi Nakamoto. While hundreds of different crypto-currency specifications exist, most are derived from one of two protocols; Proof-of-work or Proof-of-stake. All crypto-currencies are maintained by a community of crypto-currency miners who are members of the general public that have set up their computers or ASIC machines to participate in the validation and processing of transactions.

 HISTORY OF CRYPTO-CURRENCY

The first crypto-currency to be publicly recognised was Bitcoin. Bitcoin was created in 2009 by a pseudonymous developer named Satoshi Nakamoto. Bitcoin uses SHA-256, which is a set of cryptographic hash functions designed by the U.S National Security Agency. Bitcoin is a crypto-currency that is based on the proof-of-work system. In April 2011, Namecoin, the first altcoin, was created to form a decentralized DNS to make internet censorship more difficult. In October 2011, Litecoin was released and became the first successful crypto-currency to use scrypt as its hash function rather than SHA-256. This gave the general public the ability to mine for litecoins without the purchase of specific hardware such as the ASIC machines used to mine Bitcoin. Litecoin began receiving media attention in late 2013 - reaching a market cap of $1 billion. Ripplecoin, created in 2011, was built on the same protocol as Bitcoin but services as a payment system, think of it like a Paypal for crypto-currencies that supports any fiat currency, cryptocurrency, commodity or even frequent flier miles. Also, GCRcoin created in July 2014, was built around MLM in which coins are mined from the cloud by miners and shared to clients according to their various mining packages.

Conclusion

Some virtual currencies are pretending to be a crypto-currency but in reality have absolutely nothing to do with crypto-currency.

The acid test is simple ; is the currency and its value controlled by a central company? Is the currency ONLY exchangeable inside the company?

If the answer is yes to either question, then it is NOT a real crypto-currency

owned by the people, but is merely internal play money owned by the company

Visit here for a list of crypto-currencies actively in use today! 

Resources

Wikipedia Digital Currency - http://en.wikipedia.org/wiki/Digital_currency

The Real Value of Bitcoin and Crypto-Currency Technology -http://bitcoinproperly.org/#sthash.WKPFj37U.dpuf

Global Coin Reserve - www.GCRMarketing.com.

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