What is CryptoCurrency

I think that it’s safe to say that what comes in and out of the minds of people today is, pretty much anything we can do with a computer and the internet at our fingertips. The world has become so digital that many more interesting things will come into existence than just us being able to do certain things with computers. But in case you’re wondering why there’s an entire section on this website dedicated to cryptocurrency and how it benefits everyone (including me), let’s take a look at what cryptocurrency is.

What Is Bitcoin?

Bitcoin, or the crypto currency, Bitcoin as it's commonly referred to, is unique to having its own technology behind it that allows for the transfer of money between different locations without any government intervention whatsoever, all thanks to blockchain, which means that every transaction is recorded and stored as is in a chain of blocks on a decentralized ledger known as bitcoin. Even though Bitcoin isn't owned by anyone, there are a few companies that make bitcoin mining hardware available which are used by third parties in order to process transactions and confirm other users' coins. So it goes like this, Bitcoin works by allowing users to send their coins to others using peer-to-peer networks and receive them back without government involvement. In addition to making money with Bitcoin, one can also make use of cryptocurrencies like Litecoin, Ethereum, Dash, Monero, Zcash, Namecoin, etc. All these cryptocurrencies have their own pros and cons and some of the most popular cryptocurrencies include BTC, ETH, LTC, BCH, XMR, KUSD, TRX, DASH, GUSD, XMR, INR. The word "cryptographic" literally means "hidden". It’s basically a way to hide something in plain sight, sometimes in this case, you’ll find Bitcoin hidden under your socks.

How Does BitCoin Work?

I think it wouldn’t be wrong to say that Bitcoins have taken over the internet because they allow individuals from across the globe to conduct financial transactions and even exchange currencies. You don’t need to have any special knowledge about technology to understand how Bitcoin works. To start looking into Bitcoin, you’ll need the Internet Protocol Suite, but only for some websites. That’s when you’re presented with the web address https://bitcoin.btc.com/. From here you’ll be prompted to enter your payment, type in your bank account information, and finally enter any sort of password. Now, you can view the current Bitcoin price or buy some Litecoins; but make sure you have the right amount first. Once you input the necessary information, the site displays a “crypto wallet” where you’ll want to store all of your bitcoin. If you want to know more about how Bitcoin works check out MyBitcoinU.com. It’ll definitely teach you everything you need to know and get your hands dirty. Before closing out on you can also visit my profile to read what other topics I’ve written on. I hope now you have a better understanding of how Bitcoin functions, let’s move to another topic in this series, how does Ethereum work? Let ‘s dive in!

How Does Ripple Or XRP Work?

The next thing I want to talk about is XRP or xRP tokens; these are quite similar to bitcoin, they’re both digital currencies in terms of operation. For starters, they’re essentially smart contracts. They work on the same principle of decentralization as bitcoin, allowing participants to transact online and pay each other over a network. When two users want to spend their funds, they sign up for a contract of XRP and execute it through the same method as Bitcoin; sending bitcoins, then choosing the amount that it should go towards, such as 1 USD. After signing up for the XRP network, users can transfer their XRP from one place to another. A user can also withdraw his funds. While that sounds very exciting and easy, it takes longer than using bitcoin to do so. Because for every XRP you send, it comes with a minimum and maximum of 10 XRP tokens. This may seem a bit too much for someone who only really knows Ethereum or some other form of Etherium based wallets. But if you think about it, once you sell off an asset like 2 USD worth of XRP, it doesn’t matter what the market price of that XRP token is right now - you’ll always get more XRP back in your wallet than you paid for. And the same happens for cash. We’ll see you back here soon with the answer to this question!

Bitcoin Vs XRP How Are They Different?

When comparing how Bitcoin vs. XRP work, we can’t help but notice the obvious difference of the two cryptocurrencies. Whereas Bitcoin is distributed, XRP is not. Bitcoin is based on a proof of work mechanism whereas XRP is based on proof of stake, meaning that the miners are rewarded with new coins after successful staking. By rewarding users with XRP tokens when they’re successful, users can earn in XRP tokens and eventually be accepted into the system of the company. According to research, users can also claim rewards from holding XRP tokens. Which is basically XRP being the cryptocurrency equivalent of getting an email address when you purchase something online and if you have enough balance, you can then request the delivery of a particular product or service you like. As you can imagine, this can be extremely convenient and secure if you want to shop online and instantly have the option to accept or reject an offer just based on your wallet balance alone. On the contrary, when using XRP, the owner is completely anonymous; users don’t have access to the physical world. They’re all solely made by corporations that provide services. Of course, with the recent launch of the Polkadot Ecosystem, they’re going to start providing more options for users. So whether you like it or not, when you go shopping on Amazon (as opposed to buying items using PayPal) using your virtual card, that payment cannot possibly be traced back to your real identity. Another big change that they’ve brought regarding XRP is the potential use of smart contracts. These can be installed on smartphones, desktop devices or even IoT devices (like IoT homes) through SDKs, and will then be used for specific actions, including performing payments and even creating loyalty programs, which can be very helpful for those businesses who want to collect customer data. Lastly, one major advantage is that both Bitcoin and XRP are still very accessible, you can easily open an app like Coinbase and run multiple transfers every day without worrying too much about keeping your transactions private. So while you can enjoy the convenience of blockchain and decentralization, you won’t feel constrained by any government regulations or governmental rules. Most importantly however, despite the similarities, XRP is still an entirely new cryptocurrency ecosystem and therefore lacks the stability required for Bitcoin, a huge plus considering that it has been around since 2013. One might say that it’s safer, yet XRP is still just around 6 years old. So with that said, you’re probably wondering, why would we even consider Bitcoin and any cryptocurrency a superior alternative? Well, according to Google Trends, in 2019 Bitcoin was searched for 3,000 times less than Google searches for Ethereum. Which implies that at least half of the population is unaware of the cryptocurrency industry. Hopefully in the near future, this ignorance will slowly give way to increased awareness and we can see the light on other altcoins as well. Maybe that may even bring more people into cryptocurrency and give them some respect for it. Who knows? Could history repeat itself with how Bitcoin became more mainstream and trusted than ever before. Either way, good luck and stay safe!