So today we are going to give up a bit Intel about cryptocurrency and what really makes up a currency cryptocurrency just like Bitcoin.
As from the term, “Crypto” means encrypted most of you may have got the idea that its nothing just online payment method encrypted no newbies it isn’t just encrypted and online.
A currency is really cryptocurrency if it is working on a blockchain architect, has got genuine ICO (initial coin offering) no central authority but instead total user authority on a digital decentralized system that records transactions and has POW ( proof of Work).
The most important trifecta is that you should have a trust-less network really? why trust-less hold your horses’ guys trust-less mean it should not have any central or controlling authority so no trust on any third party complete user control another important fact is that it should have a huge chain architecture like a distributed network nodes and some mechanism of proof of transactions and records.
Decentralized Block Chain
Cryptocurrencies use blockchain architecture to do transactions. Precisely let’s just assume it is the only way to do online transactions and the best for recording and accounting transactions if a currency relies on a central regulatory it just can’t be called a cryptocurrency so that is why no one can call Paypal, Payoneer, Skrill etc cryptocurrencies although they have crypto secure database systems.
For a currency to have an accurate blockchain architect you need Decentralization, Cryptography of course? and proof of work or stake.
Is it Usable as Money
Well we can give you a yes on that but if the currency is monetary means nowadays they are making efforts to use it for other functions like for tracking and digital purposes like Tron and VeChain well ideas are useful but we aren’t just talking about cryptography we are talking about currency to so if it misses the idea of its invention then it is just crypto, not a cryptocurrency.
Well, all these currencies are digital and all are software setups whether web or software or miners or something it is also an important factor of cryptocurrency.
Cryptocurrencies and Non-Cryptocurrencies
We can say ripple is not a cryptocurrency just because it has cryptographic nature which credit cards also have doesn’t mean it is a cryptocurrency it has been launched by a company and has a trusty network which misses the point of a cryptocurrency of a trust-less network.
Similarly, Lightning Network which is an alternative of blockchain network coming soon is also not a cryptocurrency and will basically make other currencies non-cryptocurrencies due to its lack of decentralization and some secondary properties will be eliminated or shifted so Bitcoin may also be a victim of that.
Except for ripple, for now, we can take Bitcoin, Litecoin, DodgeCoin, Ethereum, Monero etc as true cryptocurrencies.
That’s it, readers, we have given you all of the information about cryptocurrency and what makes a true cryptocurrency.