Digital currencies are the payment methods for the future. The currencies are changing business, money and the world. As some governments accept the digital currency as a mode of payment, we feel it is important for you to know some of these digital currencies and how they operate. The following are 10 types of digital currencies and how they work:
Ethereum is a decentralized computing platform that features smart contract functionality. It offers the Ethereum Virtual Machine (EVM), a decentralized virtual machine that executes peer-to-peer contracts using a cryptocurrency known as ether. The Ethereum platform allows multiple uses concerning smart contracts. With Ethereum, you can safely do business with a person you don’t know; because all terms are spelled out in a “smart contract” entrenched in the blockchain.
Ripple is a real-time currency exchange, remittance network, and settlement system. It offers instant, certain, low-cost international payments. Also known as Ripple protocol or the Ripple Transaction Protocol (RTXP), it is built upon a decentralized open source Internet protocol and native currency referred to as XRP (ripples). Bases around public ledger, Ripple uses a consensus process to all exchange, remittance and payments in distributed process.
Litecoin is a peer-to-peer cryptocurrency released under the MIT/X11 license. The currency is Inspired by and technically almost identical to bitcoin. Litecoin formation and transfer is based on an open source protocol.
Dash, formally called Darkcoin is a more secretive form of Bitcoin. It provides more privacy as it operates on a distributed mastercode network that makes dealings nearly untraceable. Launched in 2014, the currency has an increasing fan. Created and developed by Evan Duffield, this cryptocurrency according to Fernando Gutierrez from Dash.org, has X11 ASICs that presently mine Dash and CPU mining is not profitable anymore since a while ago.
Also known as PPCoin, Peercoin was created by software developers Scott Nadal and Sunny King. Lunched in 2012, it was the first digital currency to use a combination of proof-of-work and proof-of-stake. At first, the coins are mined using the proof-of-work hashing process. Over time, as the hashing difficulty increases, the users are rewarded coins using the proof-of-stake algorithm that requires minimal energy to generate blocks.
Launched in 2013, Dogecoin is largely based on the Bitcoin protocol, but with some modifications. The currency uses the technology of scrypt as a proof-of-work scheme. Its block time is 60 seconds. There is no limit to the number of Dogecoin that can be produced. The digital currency deals with many coins that are lesser in value individually. Therefore, it has low entry barrier and good for carrying out smaller transactions.
Primecoin was developed by Sunny King. Its proof-of-work is built on prime numbers, and therefore, different from the common system of hashcash utilized by many cryptocurrencies built on the Bitcoin framework. The currency involves finding distinctive long chains of prime numbers and provides greater mining ease and security to the network.
Chinacoin is a litecoin-based digital currency that uses the scrypt password-based key derivation function. At the moment, It’s generated in 60-second blocks with an about 88 coins per block.
Ven is a global digital currency that is designed to allow trade among members of Hub Culture. Launched in 2007, Ven is aimed at reducing the risk of inflation. The Ven value is determined on the financial markets from a basket of commodities, currencies and carbon futures.
Bitcoin is a digital currency created by the mysterious Satoshi Nakamoto. Like other currencies, bitcoin can be used to buy items locally and electronically. As a new user, you can use Bitcoin without understanding all its technical details. Once you install a Bitcoin wallet on your mobile phone or computer, it will generate the first Bitcoin address and you can generate more whenever you need them. After creating bitcoins, you can use them for all types of real transactions.