CRYPTOCURRENCY

                  BY-     Aiswariya  

 In this article I’m going to share a few information about Crypto currency.

            We all now the world is moving towards bit coins which are a crypto currency. Okay then what is crypto currency. It is said to be the 21st-century unicorn – or the money of the future?

Today crypto currencies have become a global phenomenon known to most people. While still somehow geeky and not understood by most people, banks, governments and many companies are aware of its importance.

In 2016, you‘ll have a hard time finding a major bank, a big accounting firm, a prominent software company or a government that did not research crypto currencies, publish a paper about it or start a so-called block chain-project.

The invention of Bit coin by Satoshi Nakamoto in 2008 spurred the creation of many new crypto currencies known as altcoins. These altcoins use similar cryptographhy technology but employ different algorithmic designs. Many of these altcoins were invented for different purposes or to address the pain points of the Bitcoin network, such as the high usage of energy caused by its proof of work (PoW) consensus algorithm or the supply limit of 21 million coins, among others. As the network effect weighs in, the prices of bitcoin and its variants have risen in tandem. These innovations and the perceived investment potential have led to rapid growth in the number of altcoins and the market size of cryptocurrency. 

According to CoinMarketCap, nearly 869 cryptocurrencies are currently trading around the world with a combined market capitalization of US$148.3 billion by circulating supply and US$321.5 billion by total supply as of October 6, 2017. The price of bitcoin surged to US$4,780.15 on September 2, 2017. Many have argued that, despite their payment utility, bitcoin and cryptocurrencies have no intrinsic value and may be the perfect vehicle for forming a bubble.

Even for those who believe that there is intrinsic value to cryptocurrencies, when their prices are rising, there will be doubts about prices running ahead of values. Technologists will argue that their value is higher than Linux and lower than the Internet—yet both are facilitators rather than an asset class. Finance traditionalists will argue that cryptocurrency is just another form of value transfer that raises funds globally using cryptography and creates little value beyond that. For perspective, with US$40 billion and US$100 billion market capitalization for bitcoin and total cryptocurrency, respectively, this investable asset class is minute in size compared to the US$66.8 trillion and US$48.2 trillion for listed equity and gold, respectively.

Cryptocurrency is a form of digital currency. Unlike other digital currencies that can be centrally issued, circulated within a community or geographical location, or tied to fiat currency or the organizations issuing them, cryptocurrency has very different characteristics. The blockchain technology used by cryptocurrency, such as Bitcoin, is used and records transactions. This does not require a trusted third party.

 Decentralization allows the blockchain technology to have increased capacity, better security, and faster settlement. These features make cryptocurrency to become popular soonly. As a result, blockchains and cryptocurrencies have become two of the most pressing topics in the financial industry.

 Results of the comovement between traditional asset classes and the cryptocurrency index (CRIX) suggest a very low correlation between CRIX and traditional assets based on historical data. This observation suggests that cryptocurrency as an asset class is a good diversifier in a traditional portfolio.

Alternatives to Bitcoin

Despite its recent issues, Bitcoin’s success and growing visibility since its launch has resulted in a number of companies unveiling alternative cryptocurrencies, such as:

Litecoin – Litecoin is regarded as Bitcoin's leading rival at present, and it is designed for processing smaller transactions faster. It was founded in October 2011 as "a coin that is silver to Bitcoin’s gold,” according to founder Charles Lee. Unlike the heavy computer horsepower required for Bitcoin mining, Litecoins can be mined by a normal desktop computer. Litecoin’s maximum limit is 84 million – four times Bitcoin’s 21-million limit – and it has a transaction processing time of about 2.5 minutes, about one-fourth that of Bitcoin.

Ripple – Ripple was launched by OpenCoin, a company founded by technology entrepreneur Chris Larsen in 2012. Like Bitcoin, Ripple is both a currency and a payment system. The currency component is XRP, which has a mathematical foundation like Bitcoin. The payment mechanism enables the transfer of funds in any currency to another user on the Ripple network within seconds, in contrast  to Bitcoin transactions, which can take as long as 10 minutes to confirm.

MintChip – Unlike most cryptocurrencies, MintChip is actually the creation of a government institution, specifically the Royal Canadian Mint. MintChip is a smartcard that holds electronic value and can transfer it securely from one chip to another. Like Bitcoin, MintChip does not need personal identification; unlike Bitcoin, it is backed by a physical currency, the Canadian dollar.

The Future

Some of the limitations that cryptocurrencies presently face – such as the fact that one’s digital fortune can be erased by a computer crash, or that a virtual vault may be ransacked by a hacker – may be overcome in time through technological advances. What will be harder to surmount is the basic paradox that bedevils cryptocurrencies – the more popular they become, the more regulation and government scrutiny they are likely to attract, which erodes the fundamental premise for their existence. 

I conclude by saying that bitcoins and crypocurrencies are going to change the world soon.Thank you guys for such an opportunity. Correct me if I did any mistakes.

                   Thank you,