CRYPTOCURRENCIESY

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What are Cryptocurrencies?

CA cryptocurrency is a term used for virtual currency secured by cryptography making it nearly impossible to
counterfeit or double-spend. Most cryptocurrencies are decentralized networks based on blockchain
technology; a distributed ledger enforced by a disparate network of computers. The defining feature of
cryptocurrencies is that they are usually not issued by any central authority, which gives them the power to
protect themselves from government interference or deception. However, as they have become more popular,
most governments are concerned with this foundational aspect of the cryptocurrency industry.
The first cryptocurrency wasis Bitcoin, and it is one of the most popular. Other cryptocurrencies are known as
altcoins.
Some cryptocurrencies have ventured into the physical world with credit cards or other projects, but the
majority remain entirely intangible. Cryptocurrencies are always designed to be free from the manipulation
and control of central authorities. However, as it has become more popular, most governments are concerned
with this foundational aspect of the cryptocurrency industry. The altcoins have often tried to present
themselves as modified or improved versions of Bitcoin. Some of these currencies have even better features
than Bitcoin (at least some features), but the level of security like Bitcoin's network is still scarce among other
cryptocurrencies.

What is Blockchain technology?

Blockchain is a digital ledger of duplicate transactions and distributions across a network of computers on the
blockchain. Each block in the grid contains several transactions. Each time a new transaction occurs in a
blockchain, a record of that transaction is added to each participant's log in the form of a decentralized
database known as Distributed Ledger Technology (DLT) shown in Fig. 1.

Fig.1 - The properties of Distributed Ledger Technology (DLT)

Figure # and Title should be on top
Source?
Make changes to the other Figures too
All Figures should be referenced in the text (in almost all cases)
Recording information with blockchain makes it very difficult or almost impossible to change, hack, or cheat
the system. If one block in one chain is altered, it will be immediately detected and informed to the other
computers in the network. If hackers want to damage the blockchain system, they will have to change all the
blocks in the series and the distributed versions of the almost impossible series??.
Blockchains such as Bitcoin and Ethereum are these Blockhains? are constantly growing and growing, as
blocks (these are computer connected to the Bitcoin network is Ethereum connected to the Bitcoin network?
whose role is to validate the transactions entered in the ledger) are added to the chain, which adds
significantly to the security of the ledger, as the more would be the blocks, the lesser would be the chances of
fraud and other illegal activities.

Why can Cryptocurrenciesit be trusted?

There have been many attempts to make digital money, but they have consistently failed because trust is the
problem. If someone makes a new currency called X, how can we hope they won't give themselves X million
or steal your X currency.
The solution to this problem is Bitcoin, which uses a database system known as the blockchain some of this is
stated earlier. Most standard data, such as the SQL database, has a person in charge who can change entries
(e.g., donate X currency). Blockchain is different because no one is in control; it is owned by the people who
use it. In addition, bitcoins cannot be cheated, hacked, or double-used, so people who own these currencies
can count on them to have some value. Is this true for altcoins too?

Growth/Popularity of Cryptocurrency over time:

With the enhancement of technology, more and more are people are getting aware of it and due to its
exponential growth in the last few years it is attracting a lot of investors. The total number of cryptocurrency
wallets have seen a significant increase lately, which can be seen from Fig. 2.
Fig. 2 – Total number of Cryptocurrency wallets (in million). over time
Remove above Figure. Instead, include chart of “Value of Bitcoin over time”. This will be more useful.
Most Popular Cryptocurrencies?
There are more than 6,500 cryptocurrencies available as ofin September 2021. Most cryptocurrencies have a
small trading volume, but some enjoy immense popularity among specialized communities of supporters and
investors.
The top 10 most popular currencies are: Reference? –
1. ETH (Ethereum)
2. BTC (Bitcoin)
3. LTC (Litecoin)
4. ADA (Cardano)
5. DOT (Polkadot)
6. USTD (Tether)
7. DOGE (Dogecoin)
8. BNB (Binance Coin)
9. XRP (Ripple)
10. BCH (Bitcoin Cash)
Why so much empty space here?

Bitcoin, the first cryptocurrency ever created, was developed by Satoshi Nakamoto in 2008., On 18 August
2018, the domain name bitcoin.org was registered but the bitcoin network came into existence only after on 3
January 2009. At that time, Satoshi Nakamoto was mining the genesis block of bitcoin (block number 0),
which had a reward of 50 bitcoins. Very few people, if any, know the identity of Satoshi Nakamoto.
In cryptocurrency, if you want to play safe and go with the trend then Bitcoin is perfect but there are several
other options also which are much more advanced, fast and even more secure than Bitcoin. There are even
some cryptocurrency tokens such as USDT which show very little volatility as compared to Bitcoin and other
major cryptocurrencies. TNot just that, there are several types of altcoins which are listed below:
1. Mining-based coins – These crypto-assets are mined into existence as the name suggests. Most
mining-based altcoins use Proof-of-Work (PoW), a method in which systems generate new coins by
solving difficult problems, to create blocks. Examples are Litecoin and Monero.
2. Stable coins – The volatility in the cCrypto markets is high since the development of Bitcoin. The
main goal of these Stablecoins is it Stable coins or Stablecoins? is to minimize this volatility by
pegging their value to a basket of goods, such as fiat currencies, precious metals, or other
cryptocurrencies. Price fluctuations are very rare in this kind of Crypto assets. Even if other
cryptocurrencies are changing in double-digit percentages, we can rely on them that they will stay
stable over time. One of the primegreatest examples of this is Tether US.
3. Security Tokens – Security tokens are just like securities traded in stock markets except for the fact
that they have a digital provenance. They resemble traditional stocks and due to which they can
promise equity, in form of a dividend pay-out to holders, or in the form of ownership.
4. Utility token - Utility tokens are used to provide services within a network. They are mostly used to
redeem rewards or purchase services. Unlike security tokens, utility tokens do not pay out dividends
or part with an ownership stake. Filecoin, which is used to purchase storage space on a network, is an
example of a utility token.
Where do the ten leading cryptocurrencies (listed earlier) fit into the above classification?
Advantages of CryptocurrenciesBitcoin:
Fiat currencies, known as paper money or government-issued currency (like the $), have been the primary
means of any international currency transaction. This legal tender is not supported by any asset such as gold
and other precious metals but rather depends on that particular country’sits economic and financial stability.
Unlike Bitcoin which has a limited supply and thus higher chances of getting its value increased in the
future.Cryptocurrencies have limited supply.

Some of the advantages of Cryptocurrenciesy over fiat currencies are:

1. Decentralized network structure – They are known for their distinct feature of having a
decentralized system—meaning it needs no central authority or any governing body to run its
operations. Unlike traditional fiat money that is distributed and regulated by the government’s central
bank, they use nodes that verify each transaction that enters the network. These verified transactions
are kept in a public ledger that works the same way as bank records. While this ledger is available for
the eyes of everyone in the network, all personal and confidential information of every user is kept
private. This prevents fraud and other possible breaches from arising in the network to a very high
extent.
2. Ease of use and accessibility - At first, the terms Bitcoin, blockchain, and cryptocurrency might
sound overwhelming. However, contrary to what many people say about this smart technology, bitcoin
is functional and useful, especially to pay for daily transactions. Bitcoin uses digital wallets where
prices are stored, monitored, replenished and disposed of. The bitcoin wallet can be installed on your
smartphones and computers, making it accessible and easy to use. With bitcoin, payments can be made
anytime and almost anywhere in the world, and there is no need to go to banks or other financial
institutions to send money because transactions with bitcoin will only require a few clicks on your
devices.
3. A good option for market investment - Investors in Bitcoin believe the cryptocurrency will gain
value over the long term because the supply is fixed, unlike the supplies of fiat currencies such as the
 U.S. dollar or the Japanese yen. The supply of Bitcoin is capped at just under 21 million coins, while
central-bank-controlled currencies can be printed at the will of politicians. Many investors expect
Bitcoin to gain value as fiat currencies depreciate.
4. Fast transaction speed - Transfers with fiat currencies vary depending on the location, amount, and
means of transmission that you decide to use. These factors usually identify how long a transaction
will take to complete.
5. With cryptocurrenciesbitcoin, users only have to access their digital wallets and fill out the
necessary items needed for the transaction to proceed. Bitcoin transfer is available 24/7
worldwide unlike the banks and other money transfer service providers.
Why is there so much empty space here?

Disadvantages of CryptocurrenciesBitcoin:
1. Anonymization - Neither transactions nor accounts are connected to real-world identities. Here
everything is digitalized by using the internet which might lead to ease of terrorism and illegal
activities.
2. Energy Pollution – From more than 6500 cryptocurrencies, Bitcoin alone consumes around 57.09
billion kWh annually in its mining process (the process of generating Bitcoin by validating the
transaction on the ledger which is done by solving complex mathematical equations through the
computational powers), which is more than annual electric supply of Portugal. Do altcoins require
mining?
3. Too much volatility – Unexpected changes in sentiments of the market can easily lead to sharp and
sudden pricing moves. It is not uncommon for the value of cryptocurrencies to quickly drop double-
digit percentages in even a few hours.
4. No formal regulation – Cryptocurrencies are not regulated by both governments and central banks.
However, recently they have turned into a hub of attention for major investors, individuals and
institutions. For example, there are questions about whether to classify them as a commodity or a
virtual currency.

Please refer to documents again for Endnotes style. Title and Author name should be written in the beginning.
Endnotes –
1 Central Bank, https://www.centralbank.net/learning-center/what-is-cryptocurrency-and-how-does-it-
work-part-1/, accessed October 18, 2021.
2 Investopedia, https://www.investopedia.com/terms/b/blockchain.asp, accessed October 18, 2021.
3 Bankrate, https://www.bankrate.com/investing/types-of-cryptocurrency/, accessed October 18, 2021.
4 Fig. https://www.euromoney.com/learning/~/media/0E855B86EDF04F3C8EABAFC42
917C8C6.png?la=en&hash=B67568B63CBB2C0C7311DE742F5B9E48E86DC8B9, accessed October 18,
2021.
5 Metaco, https://www.metaco.com/digital-assets-glossary/cryptographic-tokens/, accessed October 18,
2021.
6 Statista, https://www.statista.com/statistics/647374/worldwide-blockchain-wallet-users/ , accessed
October 18, 2021.
7 Investopedia, https://www.investopedia.com/tech/what-happens-bitcoin-after-21-million-mined/,
accessed October 18, 2021.
8 Finance Buzz, https://financebuzz.com/reasons-crypto-is-a-bad-idea, accessed October 18, 2021.