Unveil the mysterious cryptocurrency: Bitcoin tops $40,000 on Elon Musk's Tweet

Investing with moomoo joined discussion · Jun 15, 2021 05:26

Unveil the mysterious cryptocurrency: Bitcoin tops $40,000 on Elon Musk's Tweet

Cryptocurrencies have been very volatile in the past few months. Bitcoin reached its highest level in more than two weeks on June 14, buoyed by MicroStrategy Inc. completing its $500 million offering of junk bonds to buy bitcoin and by fresh comments from Tesla CEO Elon Musk.

Bitcoin, Ethereum and Dogecoin are typical cryptocurrencies. You may have heard the term 'cryptocurrency' many times, but what are they?

The word “cryptocurrency” is derived from the encryption techniques which are used to secure the network. A cryptocurrency is a form of digital asset based on a network that is distributed across a large number of computers. This decentralized structure allows them to exist outside the control of governments and central authorities.

There are no physical cryptocurrencies, only balances kept on a public ledger that everyone has transparent access to.

Bitcoins and altcoins

Here are some of the most famous cryptocurrencies.

An Altcoin is an alternative digital currency to Bitcoin. It refers to a group of cryptocurrencies, ultimately all the cryptocurrencies other than Bitcoin. Some cryptocurrencies are created for serious reasons, while some are created just for fun. For example, the Dogecoin that went viral as Elon Musk expressed his support for the coin previously.

Bitcoins, under no doubt, own the largest market cap. But some altcoins are also widely used and have a huge market cap, for example, Ethereum, Litecoin and XRP.

Source: CoinMarketCap

Ethereum- Launched in 2015, Ethereum is the community-run technology powering the cryptocurrency, ether (ETH) and thousands of decentralized applications.

Litecoin- Litecoin, launched in 2011, is the first cryptocurrency launched after Bitcoin. The Litecoin blockchain is capable of handling higher transaction volume than its counterpart - Bitcoin. Due to more frequent block generation, the network supports more transactions without a need to modify the software in the future.

XRP- Launched in 2012, XRP is a digital asset built for payments. It is the native digital asset on the XRP Ledger which can settle transactions in 3-5 seconds. XRP was designed with sustainability in mind. Contrary to other blockchains that use proof-of-work, the XRP Ledger confirms transactions through a unique “consensus” mechanism and is one of the first truly carbon-neutral blockchains.

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