Why are there so many cryptocurrencies? Are they all just copies of Bitcoin?
Cryptocurrencies and Bitcoin
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Why are there so many cryptocurrencies? Are they all just copies of Bitcoin?
Bitcoin is a digital payment currency that utilizes cryptocurrency (a digital medium of exchange) and peer-to-peer (P2P) technology to create and manage monetary transactions as opposed to a central authority. The open source Bitcoin P2P network creates the bitcoins and manages all the bitcoin transactions.
Bitcoin History
Bitcoin is viewed as the greatest digital currency. It was first presented in 2009 and is the most generally exchanged cryptographic money. Bitcoin as an execution of the digital currency idea was portrayed by Wei Dai in 1998 on the cypherpunks mailing list.
Dai suggested a new form of money that uses cryptography to control its creation and transactions, rather than a central authority. In 2009, the Bitcoin specification and proof of concept was published in a cryptography mailing list by Satoshi Nakamoto.
How Bitcoin Works
Payments are made via a Bitcoin wallet application that resides on a user's computer or mobile device, and a person only needs to enter the recipient's Bitcoin address information and payment amount before pressing send to complete payment.
Bitcoin Mining
New bitcoins are created by a competitive and decentralized process called "mining". Bitcoin miners are processing transactions and securing the network using specialized hardware and are collecting new bitcoins in exchange. The Bitcoin protocol ensures new bitcoins are created at a fixed rate, making the process of bitcoin mining a very competitive business.
According to Week, efforts to improve Bitcoin mining are now under way, working under the basic assumption that the cheaper you can mine Bitcoins, the more money you can make.
Bitcoin Security
While aggressors are pursuing Bitcoin-related locales, there is a significant differentiation between the security of the Bitcoin organization and the Bitcoin trades. As indicated by Programming, Stockpiling, Security, Server, Systems administration News for IT Directors, nobody has at any point found a basic weakness inside the Bitcoin convention itself that would permit a client inside the Bitcoin organization to make coins or manufacture exchanges falsely.
That said, there have been compromises of various Bitcoin exchanges throughout the virtual currency's lifetime, and as the value of a Bitcoin increases, so does the risk in using exchanges
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