What Are Cryptocurrency Markets?
A Cryptocurrency, like any other form of money, is normally issued by governments or banks with the intention that it should be convertible into a certain other form of money at some point of time. It is different from traditional money in that there are no physical coins that are issued and no physical paper bills that are given out as legal tender. Rather, it is an abstract form of value which can be traded back and forth between two parties. In essence, cryptosystems are a way of managing value without using actual money. A few examples include Litecoin and Peercoin.
An example of an older form of money called the “bitponics”, which was an internet-based currency in the late 2000s, would be Litecoin and Peercoin. The main difference between these currencies is that Litecoin is a “Anoncoin” whilst Peercoin is based on the classical (and old) peer-to-peer model. While both have been traded and accepted by a wide range of websites and online services, the main difference lies in the fact that Peercoin has chosen to adopt a proof-of-work model instead of proof-of- cryptographic technologies. This has resulted in its much higher transaction fees as a result of the system being more difficult to secure.
The main feature of new currencies like Dash and Vitalik but also other ‘and currencies’ such as Iota and Dogechain is that they are traded on the same platform as the major worldwide currencies including the US dollar, Japanese yen, Euro, Australian dollar and Swiss franc. They run on different software platforms but essentially they work on the same principle by allowing users to use their computer’s resources to secure virtual money that can then be exchanged instantly between multiple parties. This is usually done through the internet by connecting a digital currency provider with an online trading platform. So far, this is the only known way of how a new currency will be able to compete against traditional paper money.