What is a Cryptocurrency?
A cryptocurrency is a digitally-encrypted, decentralized currency that is not connected to or controlled by any government or central bank, unlike traditional currencies such as the US dollar (issued by the Federal Reserve), euro (European Central Bank), or Japanese yen (Bank of Japan), among many others.
Like these traditional currencies, cryptocurrencies generally fill two primary roles:
- Payment systems for goods and services
- Speculative instruments for trading and investing
- Bitcoin- Since its inception in 2009, Bitcoin has grown rapidly in prominence as the world’s first and most popular cryptocurrency.
- Litecoin – Launched in 2011, Litecoin is used primarily as a payment transaction cryptocurrency that has been called “silver to Bitcoin’s gold.”
- Ethereum – Released in 2015, Ethereum has rapidly gained popularity on the heels of Bitcoin, and currently has a market capitalization second only to Bitcoin among cryptocurrencies.
- Ripple – Created in 2012, Ripple differs from Bitcoin in that it does not require mining to create the cryptocurrency.
- Dash – Launched in 2014, Dash, or Digital Cash, was initially known as “Darkcoin,” and is unique in that it is considered a highly anonymous and secretive cryptocurrency that specializes in virtually untraceable transactions.