Cryptocurrencies are electronic data assets that do not exist in physical form. And unlike legal tender , they are not backed by a government or central bank. Therefore, all the assets are mainly managed through a mechanism called blockchain. This is the main one among the technologies used in cryptocurrencies. The first use of blockchain technology was to create, buy and sell fiat currencies and crypto assets on exchanges around the world.
Blockchain is a technology that records multiple transactions in a block and connects them as a chain . Making all transactions public is a mechanism to prevent fraudulent actions. In addition, advanced encryption technology is used to prevent tampering with transaction logs. Currently, there are many specific blockchains for each cryptocurrency, which help and facilitate its use. This allows the use, not only in exchanges, but also as a means of payment for services and retail trade.
Bitcoin is one of the best known cryptocurrencies out there . In addition to it there are thousands of different cryptocurrencies available. Not all cryptocurrencies have the same purpose . While some are for general use, others solve specific problems and serve specific industries. For its use it is necessary to use specific technologies according to the type and utility that you want to give it, but based on Blockchain technology.
Learn about the main technologies used in cryptocurrencies here.
ethereum
It is one of the most important technologies used in cryptocurrencies. It allows the creation of distributed applications and smart contracts. It is a system created with the intention of becoming a ” world computer “ . Ethereum is a technology that hosts digital money, global payments, and applications. The community has built a booming digital economy, bold new ways for creators to earn online, and much more. It is open to everyone wherever they are in the world, all you need is the internet.
Ripple
It is an open source peer-to-peer payments network founded by Chris Larsen and Jed McCaleb. Unlike Bitcoin, the source code of the technology is privately owned by the company, which means that no one outside the company can review it. Instead of competing with Bitcoin, Ripple positions itself as a complement because it allows transfers of any currency, including Bitcoin.
Litecoin
Litecoin is a platform that was developed with the purpose of helping the problem of Bitcoin’s long transaction approval time . Bitcoin’s upper issuance limit is 21 million. But, Litecoin’s upper issuance limit is set at 84 million, which is four times that of Bitcoin. Litecoin is said to be a suitable crypto asset for small amount payments because its approval time is shorter and fees are lower than Bitcoin.
Litecoin (Eivind Pedersen, Pixabay)
polkadot
It is a technology that seeks to encourage a global network of computers to operate a blockchain on which users can launch and operate their own blockchains . In this way, Polkadot is one of the competing blockchains with the goal of growing a cryptocurrency ecosystem. Other notable examples of this include Ethereum (ETH), Cosmos (ATOM), and EOSIO (EOS). Launched in 2020, it is among the most recent and introduces a series of innovative technical features to achieve its ambitious goal.
uniswap
This technology is an Ethereum protocol for exchanging tokens. Unlike most exchanges, which are designed to charge fees, Uniswap is designed to work without charging fees , a tool for community trading tokens without intermediaries, or platform fees. Also, unlike most exchanges, which bring together buyers and sellers to determine prices and execute trades, Uniswap uses pools of tokens and a simple mathematical equation to do the same job.
SKALE
It is an open source, decentralized “elastic” blockchain network designed to scale Web3 applications . SKALE chains are configurable, application-specific blockchains (often called “dynamic shards”) that sit one layer above the Ethereum blockchain. Developers can rent SKALE chains, each of which acts as an Ethereum-compatible private smart contract platform, with faster block times and the ability to process more transactions per second.
Stellar
Stellar is an open source payment technology that shares similarities with Ripple. Like Ripple, Stellar is also a technology that aims to connect financial institutions and reduce the cost and time required for cross-border transfers. Both Ripple and Stellar initially used the same protocol. But, they differ in their clients. Ripple works with already established banks or syndicates in order to optimize their cross-border transfer technology. By contrast, Stellar focuses on developing markets.
Cardano
Cardano is a computing platform that implements blockchain technology for the ADA currency. As a decentralized blockchain platform, Cardano is a completely open source project and is the first cryptocurrency platform based on Haskell code. An industrial product used for critical situation management systems. Also, it is one of the competing proof-of-stake blockchains. This is one of the technologies used in cryptocurrencies that allows the owners of their cryptocurrency, ADA, to help operate their network and vote on changes to their software rules.
IOTA
It is a network and cryptocurrency project based on DAG technology and that aims to be the bridge that unites all the IoT devices in the world under a high-speed, scalable, and secure network. It is a DLT protocol that, together with a cryptocurrency, seeks to develop highly scalable solutions that allow IoT devices to interconnect in a secure and decentralized network. Of course, this vision does not give up other uses of cryptocurrencies such as financial transactions, but its focus is more focused on other things.
dash
It is a technology that has advanced capabilities, including instant transactions (InstantSend), private transactions (PrivateSend), and decentralized governance (DGBB). Dash’s decentralized budgeting and governance system makes it the first decentralized autonomous organization. Dash works on a two-tier architecture, including miners and masternodes , focused on improving user experience and privacy. Dash’s innovations will help evolve the cryptocurrency market as it is focused on improving transaction speed and anonymity.
