Sun. May 26th, 2024

Bitcoin has been the basis for other virtual currencies; the operation of most of these is very similar. In general, the changes concern the number of units of the currency that can be generated and other technical aspects, but the basic operation is the same. In addition, in some cases, alternative currencies have a reason for being, a goal that their creators seek to achieve by promoting the use of their currency.

There are more than 200 virtual currencies, most of them with very little capitalization. The list is obviously opened by Bitcoin, with more than 5.5 billion dollars in value, and closed by Spain Coin, with just over a million. The latter is created in Spain and we will return to it later.

A brief history of Bitcoin

The new bitcoins are generated as a reward to the cooperating nodes dedicating the processing capacity of their equipment to the operation of the network processing transactions. When all possible bitcoins have been generated, the reward will be limited to voluntary fees for processing network transactions. So one must avoid common investment mistakes when using bitcoin.

The other cryptocurrencies

Although Bitcoin is the currency that everyone talks about, the one that  some payment systems are beginning to incorporate  into their service offering and has more possibilities of becoming something of daily use, there are other currencies that should be known. Here we will talk about some of them, focusing on those that provide the greatest differences with respect to the Bitcoin model.

Ripple, a solidarity currency

You can create decentralized networks using only trusted contacts. This is the revolutionary idea of Ripple, the network created by Ryan Fugger. Relying on these trusted contacts, the transaction passes from one point to another until it reaches its destination, in a similar way to data packets on the Internet.

The first one is called Ripple. For some, Ripple (whose abbreviated name is XRP) is not a currency, but rather a means of payment. On the other hand, we include it because the way of using Ripple coincides with the majority use of Bitcoin: as an intermediate currency to carry out transactions that, in addition, can take place between different currencies. It also differentiates it from Bitcoin that the supply of monetary units is much higher and, in part as a consequence, its unit value is very small. The first version of Ripple was developed in 2004, long before Bitcoin appeared. In 2011, Ripple was redesigned, to some extent to adapt after Bitcoin’s success.

To enter or withdraw conventional money from Ripple, it is necessary to do it through nodes called gateways, which act as a bank. Through a trust system designed by its creator, Ryan Fugger, trust lines are established between users, which can limit the maximum amount that a certain user is trusted.

This cryptocurrency is not only used as an exchange currency. It is also used as a way to combat spam : by requiring each user a small reserve of the currency, and charging a minimum amount for each transaction, this problem is limited: the proposal is that each user start with 20 XRP (approximately 0, $ 16 at the current exchange rate). With this balance, it would be possible to make more than 50 daily transactions during 100 years. On the other hand, if the transactions are very repetitive, the unit cost would rise, preventing it from continuing to make transactions in bulk. The XRP coins used for these transactions do not go anywhere, but are destroyed.

In addition, instead of producing new monetary units as a reward for the nodes that help the network, they are distributed among users who give up processor time to tasks such as investigating diseases such as cancer and HIV, as well as other solidarity causes related to the environment and science. In this way, coins from the Ripple network are not produced through an intensive process that is unhealthy for the environment. All that CPU usage is dedicated to useful causes for society.

So Ripple is one of best currencies using which you can get huge profit in small interval of time. It is easy to use currencies.

By admin

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