Cryptocurrency Guide For Beginners

It offers much higher levels of functionality than Bitcoin, allowing developers to build anything from decentralized autonomous organizations to complex distributed applications.

Smart contracts allow two parties to enter into a legally binding agreement without having to trust each other.

This eliminates the need for third-party intermediaries such as lawyers, bankers, and escrow agents.

Smart contracts also eliminate fraud because they automatically enforce terms agreed upon by both parties.

In addition to eliminating middlemen, smart contracts provide an immutable audit trail. This means that once a contract has been executed, nobody can change or delete the data stored within it.

Like Bitcoin, Ethereum is decentralized, meaning that there is no centralized governing body that controls the creation of new Ethers. Instead, miners compete against one another to create new Ethers.

Miners receive rewards in the form of Ethers for validating transactions. These rewards are used to pay for computing power.

The pros of Ethereum include its ability to run code automatically when certain conditions occur, which can be used to create trustless contracts, as well as its support for Turing-complete virtual machines.

These features enable developers to create highly flexible programs that can adapt to changing circumstances. Cons of Ethereum include its high energy consumption and slow transaction speed.

The latter issue is due to the fact that every time someone sends money to someone else, the network must validate all the information associated with the transaction.

Litecoin (LTC)

Litecoin is a peer-to-peer digital currency that was created in 2011 as a cheaper and less centralized version of Bitcoin.

It uses open source cryptographic protocols similar to those employed by Bitcoin, but with a key difference.

Unlike Bitcoin, however, Litecoin does not use proof-of-work consensus algorithms.

Instead, it relies on a proof-of-stake system called “scrypt”, and this algorithm requires users to lock up their coins before they can spend them.

Once locked up, these coins cannot be moved until a specified amount of time passes.

As a result, people who own large amounts of Litecoins tend to hoard them rather than spend them. This makes Litecoin less attractive to merchants than Bitcoin.

Pros of Litecoin include its faster transaction times and lower fees compared to Bitcoin, while cons of Litecoin include its low-security level and lack of anonymity, as well as a similarity to Bitcoin making it more vulnerable to hacks and scams.

Bitcoin Cash (BCH)

Bitcoin cash is a hard fork of Bitcoin that occurred in August 2017. It was created after a group of developers disagreed over how to scale Bitcoin’s underlying protocol.

This disagreement resulted in a split between the original Bitcoin community and a separate group of developers.

As a result, the two groups developed different versions of Bitcoin, with the original version becoming known as Bitcoin and the new version becoming known as Bitcoin cash.

The main differences between Bitcoin and Bitcoin cash are:

• Bitcoin cash allows for larger blocks, which increases the number of transactions that can take place per second.
• Bitcoin cash uses a different hashing algorithm, which results in faster block generation.
• Bitcoin cash supports SegWit, which enables it to process more transactions at any given time.
• Bitcoin cash has a higher maximum supply limit than Bitcoin.

Pros of Bitcoin Cash include its increased capacity to handle more transactions, as well as its faster block generation rate, while cons include its lower security level and lack of privacy, as well as the possibility of double spending.

Ripple (XRP)

Ripple is an open-source cryptocurrency that was founded in 2012.

Its primary goal is to provide financial institutions with a fast, secure, and cheap way to send money around the world.

It achieves this through a distributed ledger technology known as the xRapid platform. This platform consists of three components:

• A payment gateway that connects banks and other financial institutions to Ripple’s blockchain.
• An escrow service that holds funds from both parties involved in a transaction until all payments have been made.
• The XRP token, which acts as a bridge currency used to make payments across the network.

Ripple is one of the most popular cryptocurrencies due to its ability to facilitate cross-border transfers quickly and cheaply.

However, it also has some drawbacks, including high transaction costs and slow confirmation times.

Pros of Ripple include its ability to transfer money internationally quickly and cheaply, as well as its ability to support multiple currencies, while downsides include its high transaction costs and slow confirmations.

Dash

Dash is a peer-to-peer digital currency designed to be easy to use and inexpensive to transact.

It was launched in 2014 by Evan Duffield, who wanted to create a decentralized alternative to PayPal.

Duffield’s vision was to develop a system where anyone could become a merchant or vendor without having to rely on third-party intermediaries like credit card companies.

To achieve this, he built Dash into a self-funding project, meaning that no central authority controls the creation of new coins.

Instead, each coin is generated using a cryptographic function called “proof of work”.

In order to prevent fraud, Dash also includes a set of features called PrivateSend, which enables users to send coins anonymously.

Pros of Dash include its low fees, anonymous transactions, and self-funding nature, while cons include its limited functionality and centralized development team.