All about Cryptocurrency

A crypto currency is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency. Crypto currencies are a subset of alternative currencies, or specifically of digital currencies.

Bit coin became the first decentralized crypto currency in 2009. Since then, numerous crypto currencies have been created. These are frequently called alt coins, as a blend of bit coin alternative. Bit coin and its derivatives use decentralized control as opposed to centralized electronic money/centralized banking systems. The decentralized control is related to the use of bit coin’s block chain transaction database in the role of a distributed ledger.

Bit coin is invented by Satoshi Nakamoto, who published the invention in 2008 and released it as open-source software in 2009. The system is peer-to-peer; users can transact directly without an intermediary. Transactions are verified by network nodes and recorded in a public distributed ledger called the block chain. The ledger uses bit coin as its unit of account. The system works without a central repository or single administrator, which has led the U.S. Treasury to categorize bit coin as a decentralized virtual currency. Bit coin is often called the first crypto currency, although prior systems existed. Bit coin is more correctly described as the first decentralized digital currency. It is the largest of its kind in terms of total market value.

Bit coins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into a public ledger. This activity is called mining and miners are rewarded with transaction fees and newly created bit coins. Besides being obtained by mining, bit coins can be exchanged for other currencies, products, and services.

The overall supply of bit coins is finite, and comprises 21 million coins. A coin first sees the light every time a miner solves a block. The bit coin protocol dictates that the quantity of bit coins used as a reward from a block shall half every 210,000 blocks. In average, there are around six blocks deciphered in an hour; therefore, generating 210,000 blocks takes roughly 4 years. In exchange for securing the Bit coin network and processing transactions, the protocol currently rewards these miners with 25 bit coins for every block of transactions found. However, this reward for miners will soon be cut in half from 25 bit coins to 12.5 bit coins. This halving will occur at block 420,000, as a single block. Takes roughly ten minutes to be mined; the reward halving is set to occur in July or August 2016.

There are several ways to earn Bit coin and other crypto currencies. Smaller amounts can easily be earned through faucets, or participating in signature campaigns through forums. But what makes the most profit is trading. There are many exchanges on which you can trade like Bittrex, Bitstamp, BTC-e and many others. You can trade manually, but there are programs that do this automatically. You only need to choose markets, set the first orders and parameters (not mandatory) and then let algorithm trade for you.