About Crypto-Currencies (2014)
“A cryptocurrency is a digital medium of exchange. The first cryptocurrency to begin
trading was Bitcoin in 2009. Since then, numerous cryptocurrencies have been created.
Fundamentally, cryptocurrencies are specifications regarding the use of currency which seek
to incorporate principles of cryptography to implement a distributed, decentralized and secure
information economy. When comparing cryptocurrencies to fiat money, the most notable
difference is in how no group or individual may accelerate, stunt or in any other way
significantly abuse the production of money. Instead, only a certain amount of cryptocurrency
is produced by the entire cryptocurrency system collectively, at a rate which is bounded by a
value both prior defined and publicly known.
In centralized economic systems such as the Federal Reserve System governments regulate
the value of currency by simply printing units of fiat money or demanding additions to digital
banking ledgers, however governments cannot produce units of cryptocurrency and as such
governments cannot provide backing for firms, banks or corporate entities which hold
asset value measured in a decentralized cryptocurrency. The underlying technical system
upon which all cryptocurrencys are now based was created by the anonymous group or
individual known as Satoshi Nakamoto for the purpose of creating an economy within which
the practice of fractional reserve banking would be fundamentally impossible.[1][2][3]”
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Criticism:
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“Some have expressed concern that cryptocurrencies are extremely risky due to their
very high volatility[51] and potential for pump and dump schemes[52]
Some cryptocurrency systems are pre-mined, have hidden launches, or have extreme
rewards for the first miners.[53][better source needed] Pre-mining means currency is
generated by the currency's founders prior to mining code being released to the
public.[54] It often refers to a deceptive practice, but can also be used as an inherent
part of a digital cryptocurrency's design, as in the case of Ripple or Nxt.[55]
Most cryptocurrencies are duplicates of existing cryptocurrencies with minor changes
and no novel technical developments. One such, "Coinye West", a comedy
cryptocurrency alluding to the rapper Kanye West, was served a cease-and-desist letter
on January 7, 2014.[56]
Very few cryptocurrencies can be exchanged for fiat currencies and instead can only
be traded for other cryptocurrencies. Banks generally do not offer services for them
and sometimes refuse to offer services to virtual-currency companies.[57]
Regulators in several countries have warned against their use and some have taken
concrete regulatory measures to dissuade users.[58]”
(Source: http://en.wikipedia.org/wiki/Cryptocurrency)
“Bitcoin is a peer-to-peer payment system and digital currency introduced as open source
software in 2009 by developer Satoshi Nakamoto. It is a cryptocurrency, so-called because it
uses cryptography to control the creation and transfer of money.[5] Conventionally, the
capitalized word "Bitcoin" refers to the technology and network, whereas lowercase "bitcoin"
refers to the currency itself.[6]
Bitcoins are created by a process called mining, in which computer network participants, i.e.
users who provide their computing power, verify and record payments into a public ledger in
exchange for transaction fees and newly minted bitcoins.[7] Users send and receive bitcoins
using wallet software on a personal computer, mobile device, or a web application. Bitcoins
can be obtained by mining or in exchange for products, services, or other currencies.[8]”
(Source: http://en.wikipedia.org/wiki/Bitcoin )
Video clips on cypto-currency:
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Bitcoin Explained http://www.youtube.com/watch?v=SEbCbp1vc9Y
How Bitcoin Works Under the Hood http://www.youtube.com/watch?v=Lx9zgZCMqXE
Bitcoin FAQ https://bitcoin.org/en/faq#why-do-bitcoins-have-value
Peercoin http://www.youtube.com/watch?v=TjL2AgCQDJ0
(Source: http://www.cryptocurrencychart.com/ )