Bitcoin is a cryptocurrency that is created and managed through the use of advanced encryption techniques known as cryptography. It was designed to work as a medium of exchange that uses cryptography to control it's creation and management, rather than relying on Central authorities. It was invented and implemented by presume pseudonymous Satoshi Nakamoto, who integrated many existing ideas from the cypherpunk community. Bitcoin over the years has undergone rapid growth to become relevant both online and offline.
Before the release of Bitcoin, there were so many digital cash technologies starting with the issuer based cash protocol of David chaum and Stefan brands.
Future for crypto currency
Cryptocurrency has become a global phenomenom in recent years, although much is still to be learned about this evolving technology. There are many concerns and worries swirling around the technology and its capacity to disrupt traditional financial systems.
There is the possibility that crypto will be floated on the National Association of Securities Dealers Automated Quotations., which would further add credibility to blockchain and its uses as an alternative to conventional currencies.
How Bitcoin works
Bitcoin is a cryptocurrency, meaning it’s supported by a source code that uses highly complex algorithms to prevent unauthorized duplication or creation of Bitcoin units. The code’s underlying principles, known as cryptography, are based on advanced mathematical and computer engineering principles. It’s virtually impossible to break Bitcoin’s source code and manipulate the currency’s supply.
Advantages of Using Bitcoin
(1) Greater Liquidity Relative to Other Cryptocurrencies.
(2) Increasingly Wide Acceptance as a Payment Method.
(3) International Transactions Easier Than Regular Currencies.
(4) Generally Lower Transaction Fees.
(5) Anonymity and Privacy Relative to Traditional Currencies.
Alternative of Bitcoin
1. Ethereum (ETH)
Ethereum, is a decentralized software platform that enables Smart Contracts and Decentralized Applications (DApps) to be built and run without any downtime, fraud, control, or interference from a third party. The goal behind Ethereum is to create a decentralized suite of financial products that anyone in the world can have free access to, regardless of nationality, ethnicity, or faith. This aspect makes the implications for those in some countries more compelling, as those without state infrastructure and state identifications can get access to bank accounts, loans, insurance, or a variety of other financial products.
The applications on Ethereum are run on its platform-specific cryptographic token, ether. Ether is like a vehicle for moving around on the Ethereum platform and is sought by mostly developers looking to develop and run applications inside Ethereum, or now, by investors looking to make purchases of other digital currencies using ether. Ether, launched in 2015, is currently the second-largest digital currency by market cap after Bitcoin, although it lags behind the dominant cryptocurrency by a significant margin. As of January 2021, ether's market cap is roughly 19% of Bitcoin's size.
2. Litecoin (LTC)
Litecoin, launched in 2011, was among the first cryptocurrencies to follow in the footsteps of Bitcoin and has often been referred to as “silver to Bitcoin’s gold.” It was created by Charlie Lee, an MIT graduate and former Google engineer. Litecoin is based on an open-source global payment network that is not controlled by any central authority and uses "scrypt" as a proof of work, which can be decoded with the help of CPUs of consumer-grade. Although Litecoin is like Bitcoin in many ways, it has a faster block generation rate and hence offers a faster transaction confirmation time. Other than developers, there are a growing number of merchants who accept Litecoin.
3. Cardano (ADA)
Cardano is an “Ouroboros proof-of-stake” cryptocurrency that was created with a research-based approach by engineers, mathematicians, and cryptography experts. The project was co-founded by Charles Hoskinson, one of the five initial founding members of Ethereum. After having some disagreements with the direction Ethereum was taking, he left and later helped to create Cardano.
The team behind Cardano created its blockchain through extensive experimentation and peer-reviewed research. The researchers behind the project have written over 90 papers on blockchain technology across a range of topics. This research is the backbone of Cardano.
Due to this rigorous process, Cardano seems to stand out among its proof-of-stake peers as well as other large cryptocurrencies. Cardano has also been dubbed the “Ethereum killer” as its blockchain is said to be capable of more. That said, Cardano is still in its early stages. While it has beaten Ethereum to the proof-of-stake consensus model it still has a long way to go in terms of decentralized financial applications.
5. Bitcoin Cash (BCH)
Bitcoin Cash (BCH) holds an important place in the history of altcoins because it is one of the earliest and most successful hard forks of the original Bitcoin. In the cryptocurrency world, a fork takes place as the result of debates and arguments between developers and miners. Due to the decentralized nature of digital currencies, wholesale changes to the code underlying the token or coin at hand must be made due to general consensus; the mechanism for this process varies according to the particular cryptocurrency.
When different factions can’t come to an agreement, sometimes the digital currency is split, with the original chain remaining true to its original code and the new chain beginning life as a new version of the prior coin, complete with changes to its code.