In a word, yes. Bitcoin was the initial cryptocurrency, and remains the biggest, nevertheless in the eight years since it was created pretenders to the throne have come along. Every one of them have a similar basic underpinnings: they normally use a “blockchain”, a shared public record of transactions, to generate and track a whole new form of digital token – one that can only be made and shared according to the agreed-upon rules of the network, whatever they might be. Nevertheless the flourishing ecosystem has provided a huge amount of variation in addition to that.
Some cryptocurrencies, including Litecoin or Dogecoin, fulfil exactly the same purpose as bitcoin – creating a new digital currency – with tweaks to some of the details (making transactions faster, for instance, or ensuring a fundamental level of inflation). Others, such as Ethereum or Bat, consider the same principle but put it on to your specific purpose: cloud computing or digital advertising in the case of the two.
What exactly is a bitcoin? May I hold one? – A bitcoin doesn’t really exist being a concrete physical – as well as digital – object. Should I have .5 bitcoins being placed in my digital wallet, that doesn’t mean there exists a corresponding other half sitting somewhere else.
What you have when you own a bitcoin will be the collective agreement of each and every other computer on the bitcoin network that your bitcoin was legitimately developed by a bitcoin “miner”, and then handed down to you personally through a series of legitimate transactions. In order to actually own some bitcoin, there are exactly two options: either turn into a miner (which involves investing a lot of cash in computers and power bills – probably more than the need for the bitcoin you’ll actually make, unless you’re very smart), or simply buy some bitcoin from another person using conventional money, typically via a bitcoin exchange such as Coinbase or Bitfinex.
Many of the quirks of the currency fall for the collective agreement about what constitutes “legitimacy”. For instance, since the first bitcoin was created during 2009, the total number in existence has been growing slowly, in a declining rate, making certain sooner or later around 2140, the 21 millionth bitcoin will likely be mined, with no more is ever going to be created.
Should you disagree with this collective agreement, well, there’s nothing stopping you from splitting with all the wider network and creating your personal version of bitcoin. This can be what’s known as a “fork”, and it’s already happened several times before (that’s what competitors such as Litecoin and Dogecoin are). The issue is persuading other individuals to adhere to you. A currency used by just one person isn’t a good deal of currency.
What can I actually use cryptocurrencies? – In theory, just about anything that can be done having a computer could, in some manner, be rebuilt on the Cryptocurrency Trading Design. Constructing a cryptocurrency involves rkabxo a worldwide network of computers into a decentralised platform for data storage and processing – ultimately, a huge hive-mind PC (that the no more sounds like it provides much to do with “currencies” is area of the reason some instead suggest the name “decentralised apps” to protect this sector).
We’ve already seen proposals for YouTube clones, collectible card games and digital advertising exchanges built on top of cryptocurrencies: “x but on the blockchain” is definitely the new startup pitch du jour, given that “Uber for x” and “x but on the iPhone” are passé. There’s already Dentacoin (Yelp for Dentists but on the blockchain), Matchpool (Tinder but on the blockchain) as well as Cryptokitties (Tamagotchis but on the blockchain).
In practice, however, the accessible uses are rather more limited. Bitcoin can be used as a payment system for a few online transactions, as well as fewer real-world ones, while other cryptocurrencies are much more juvenile than that. The excitement about the field is focused much more on what it could become compared to what it actually is.