Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and to control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control.
Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Cryptocurrencies are often traded on decentralized exchanges and can also be used to purchase goods and services.
Bitcoin is the most well-known cryptocurrency but there are many others including Ethereum, Litecoin, Bitcoin Cash, Ripple, Monero and more. These other cryptocurrencies are often referred to as altcoins.
Each cryptocurrency has its own blockchain, a digital ledger that records all transactions. Bitcoin’s blockchain is the longest and most well-known but other blockchains can be shorter or have different features.
Cryptocurrencies are often traded on decentralized exchanges but can also be purchased with fiat currencies (like USD) on centralized exchanges. decentralized exchanges match buyers and sellers directly while centralized exchanges act as an intermediary between buyers and sellers.
Cryptocurrencies can also be used to purchase goods and services although this is less common than trading or investing in them.
What Cryptocurrency Is Most Like Bitcoin?
While there are many different cryptocurrencies, some are more similar to Bitcoin than others. Ethereum and Litecoin both have faster transaction times than Bitcoin and lower fees. Bitcoin Cash is a fork of Bitcoin with bigger block sizes that allows for faster transactions.
Ripple is a cryptocurrency focused on facilitating international payments for banks and other financial institutions. Monero is a privacy-focused cryptocurrency that offers greater anonymity than Bitcoin.