Cryptocurrencies come with a package of unique features which are exclusive to them, and have common functionalities within the currency markets. Below are some of the key features of cryptocurrencies:
- Decentralization – Cryptocurrencies are not issued by any central authority, such as a government or bank. Instead, they are created and managed by a network of computers that run the cryptocurrency’s software. This decentralization makes cryptocurrencies immune to government interference or manipulation.
- Security – Cryptocurrencies use cryptography to secure their transactions and to create new units. This cryptography makes it very difficult to counterfeit or double-spend cryptocurrencies.
- Transparency – All cryptocurrency transactions are recorded on a public ledger called a blockchain. This ledger makes it possible to track all cryptocurrency transactions, which helps to prevent fraud and corruption.
- Immutability – Once a cryptocurrency transaction is recorded on the blockchain, it cannot be changed or deleted. This immutability makes cryptocurrencies ideal for storing value and for making secure payments.
- Limited supply – Most cryptocurrencies have a limited supply, which means that they cannot be inflated by governments or banks. This limited supply makes cryptocurrencies a good store of value and an attractive investment.
Despite cryptocurrencies having such solid features which makes it accessible within the currency markets, there are cryptocurrencies that come with their own unique features which are different from one another;
Etheruem
Ethereum was created in 2015 by Vitalik Buterin. It is a decentralized open-source blockchain system that features its own cryptocurrency, Ether. ETH works as a platform for numerous other cryptocurrencies, as well as for the execution of decentralized smart contracts. Smart contracts are self-executing contracts that can be used to automate transactions and agreements.
Etheruem can be easily identified with its features like;
- Scalability – Ethereum is constantly being improved, and new scalability solutions are being developed all the time. As these solutions are developed and implemented, Ethereum will become even more scalable.
- Turing-complete – Ethereum is a Turing-complete platform, which means that it can be used to create complex smart contracts. Smart contracts are self-executing contracts that can be used to automate transactions and agreements.
Bitcoin
Bitcoin was created in 2009 by an anonymous person or group of people under the name Satoshi Nakamoto. It is the first and most well-known cryptocurrency. Bitcoin is designed to be a peer-to-peer currency, which means that it can be used to send and receive money without the need for a third party, such as a bank. Bitcoin transactions are recorded on a public ledger called a blockchain.
Bitcoin contains some unique characteristics like;
- Secure – Bitcoin uses cryptography to secure its transactions and to create new units. This cryptography makes it very difficult to counterfeit or double-spend Bitcoin.
- Decentralization – Bitcoin is not issued by any central authority, such as a government or bank. Instead, it is created and managed by a network of computers that run the Bitcoin software. This decentralization makes Bitcoin immune to government interference or manipulation.
Ripple
Ripple is a blockchain-based payment system and digital asset that was created in 2012 by Jed McCaleb and Chris Larsen, that also has a native cryptocurrency called XRP. XRP can be used to pay transaction fees on the Ripple network. XRP can also be used to send money internationally.
Here are some of the key features of Ripple:
- Speed – Ripple transactions can be processed quickly, typically in seconds.
- Cost – Ripple transactions are very low cost, typically less than a penny.
- Global reach – Ripple can be used to send money anywhere in the world.
Why Know Them All Separately?
When investing in cryptocurrencies, it is important to understand the different features of each cryptocurrency, as it will help you to make informed decisions about which cryptocurrencies to invest in, whereas there are a number of different cryptocurrencies available, each with its own unique features. By understanding the features of each cryptocurrency, you can choose the right cryptocurrency for your needs.
