The Benefits Of Currency And Ledger Protocol On The Cryptocurrency Market
A Cryptocurrency, as defined by Wikipedia, is “a type of currency that derives its value from a cryptography-based digital ledger”. A decentralized system of record-keeping is central to the functioning of a true Cryptocurrency. A Cryptocurrency can take many forms, ranging from the traditional peer-to-peer digital cash system to the Internet-based Electronic Funds Transfer protocol. Regardless of the type of Cryptocurrency chosen, one thing is certain: without an open source software and infrastructure, no Cryptocurrency can function.
There are many Cryptocurrency experiments currently underway. Some of these experiments include the experimental Dashboard, the upcoming Zcash, and the Litecoin among many others. An average citizen cannot keep track of many of the exchanges on the market, which is the crux of the matter. Without a ledger, a Cryptocurrency is useless. Fortunately, there are many technologies out there that can remedy this problem.
The most notable open-source Cryptocurrency system is the bitcoin ledger. The bitcoin ledger is a global network of servers maintained by the bitcoin technology firm that operates the network of computers that facilitate the trade and communication of information between buyers and sellers across the globe. This ledger serves as the backbone for the decentralized nature of many modern Cryptocurrencies. Because of this, most altcoins that do not run on the bitcoin protocol are derived from the bitcoin technology.
One of the most unique characteristics of any modern day Cryptocurrency is the fact that it exists outside of any known physical location. This enables the user to transact on any currency anywhere in the world at any time. However, many Cryptocurts still need to have a central authority to maintain control over the system. The central authority for most of the bitcoin currencies is called the “miner” because they manually verify transactions and add new blocks of information to the bitcoin chain.
The major benefit of working with a ledger other than the bitcoin protocol is the ability to incorporate new technological innovations into the Cryptocurrency system. This brings about much more opportunities to the wide range of customers and consumers of the different cryptosystems. In order for any technological innovation to be successful it must be backed by an active community that cares enough about the technology to spend their valuable time monitoring and improving upon it.
With the introduction of the bitcoin ledger, several new avenues for growth of the cryptocururencies were opened. With more people joining the ranks of participating in the economic system of these new currencies, the demand for such a service will continue to grow. As a result, the number of potential users for any given altcoin will continue to grow. It is not a far reach to assume that many cryptosystems will surface in the future, each one of them drawing on the technology and knowledge of its previous predecessors to become the most successful of its kind.