cryptocurrency (or cryptocurrency) is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. Cryptocurrencies are a subset of alternative currencies, or specifically of digital currencies.Bitcoin became the first decentralized cryptocurrency in 2009. Since then, numerous cryptocurrencies have been created. These are frequently called altcoins, as a blend of bitcoin alternative. Bitcoin and its derivatives use decentralized control as opposed to centralized electronic money/centralized banking systems. The decentralized control is related to the use of bitcoin's blockchain transaction database in the role of a distributed ledger.Timestamping
Cryptocurrencies use various timestamping schemes to avoid the need for a trusted third party to timestamp transactions added to the blockchain ledger.
Proof-of-work schemes
The first timestamping scheme invented was the proof-of-work scheme. The most widely used proof-of-work schemes are based on SHA-256, which was introduced by bitcoin, and script, which is used by currencies such as Litecoin.
The latter now dominates the world of cryptocurrencies, with at least 480 confirmed implementations.
Some other hashing algorithms that are used for proof-of-work include CryptoNight, Blake, SHA-3, and X11.
Proof-of-stake and combined schemes
Some cryptocurrencies use a combined proof-of-work/proof-of-stake scheme. The proof-of-stake is a method of securing a cryptocurrency network and achieving distributed consensus through requesting users to show ownership of a certain amount of currency. It is different from proof-of-work systems that run difficult hashing algorithms to validate electronic transactions. The scheme is largely dependent on the coin, and there's currently no standard form of it.
The first timestamping scheme invented was the proof-of-work scheme. The most widely used proof-of-work schemes are based on SHA-256, which was introduced by bitcoin, and script, which is used by currencies such as Litecoin.
The latter now dominates the world of cryptocurrencies, with at least 480 confirmed implementations.
Some other hashing algorithms that are used for proof-of-work include CryptoNight, Blake, SHA-3, and X11.
Proof-of-stake and combined schemes
Some cryptocurrencies use a combined proof-of-work/proof-of-stake scheme. The proof-of-stake is a method of securing a cryptocurrency network and achieving distributed consensus through requesting users to show ownership of a certain amount of currency. It is different from proof-of-work systems that run difficult hashing algorithms to validate electronic transactions. The scheme is largely dependent on the coin, and there's currently no standard form of it.