What is Cryptocurrency?
Cryptocurrency is a method of exchange procedures utilizing cryptography to help secure transactions and also to control creation of newer units. Crypto currencies are subgroups of alternative currencies especially of digital currencies. The first regionalized crypto currency to be used was Bitcoin in 2009 after which there emerged a number of cryptocurrencies which were often called altcoins as an assortment of bitcoin alternative.
The difference between electronic money and cryptocurrency lies in its manner of decentralized control unlike electronic money or banking systems having centralized control.
Wei Dai in 1998 had published an explanation on “b-money”, which was an anonymous electronic cash system. This was followed by Nick Szabo creating “Bit Gold”. Bit Gold was similar to its successor Bitcoin in being an electronic currency system that required operators to complete in particular a proof of work role that had solutions cryptographically combined together and published.
Listing of few Cryptocurrencies..
Bitcoin, which was the very first regionalized cryptocurrency, was created by a pseudonymous developer named Satoshi Nakamoto. This cryptocurrency used a cryptographic function called SHA-256 as the proof of work pattern. In the April of 2011, Namecoin was developed with an aim to form a decentralized DNS that would be capable of making internet censorship very tough. Namecoin was soon followed by Litecoin being created in October 2011. This was the first of its kind that could use scrypt instead of SHA-256 as the hash function propecia pills online. Later Peercoin emerged that could utilize a proof of work or proof of stake hybrid. A chain of various other cryptocurrencies followed only some being successful because of their lack in technical innovations. In August 2014, UK declared its Treasury to commence a study of cryptocurrencies to find out if they could play any valuable role in the progress of UK economy.
2014 onwards a new set of cryptocurrencies evolved, often referred to as the 2nd-generation of crypto currencies as they had some unique features absent in the earlier one like, stealth addresses, assets or side chains, smart contracts, and so on. These included Monero, NXT and Ethereum.
Competition within Cryptocurrency Market
At present, there exist more than 200 digital currencies. Network Effects play crucial role in assessing the developmental role of cryptocurrency markets and the underlying competitions. Popularity of a particular currency plays essential role in the success of that currency since any currency’s given value increases with increasing number of its users. Economists theorize that most popular cryptocurrencies will attract more users because of the growing size of exchange pools and thus such cryptocurrencies will become the larger competitors and dominate the markets
A study titled “Competition in the Cryptocurrency Market” was conducted from 2013 to 2014 for three periods by NET institute members. The study analysed the changes in price data for a time period with respect to budding cryptocurrency markets by analyzing Bitcoin and other emerging altcoins like Litecoin, Peercoin, Namecoin being listed in order of producing largest percentage of digital market capitalization respectively behind Bitcoin, which accounted for 90% capitalization.