An introduction to virtual currency

Digital currency

Digital currency is established based on mathematical algorithm, does not need the intervention of third-party credit institutions, any agreed participants can use it, and can play a variety of monetary functions in the network virtual space.

Bitcoin

Bitcoin is a virtual encrypted digital currency in the form of P2P. Peer-to-peer transmission means a decentralized payment system.

Unlike all currencies, Bitcoin does not rely on specific monetary institutions to issue, it is generated through a large number of calculations according to specific algorithms. Bitcoin economy uses a distributed database composed of many nodes in the entire P2P network to confirm and record all transactions, and uses cryptographic design to ensure the security of all aspects of money circulation. The decentralized nature of P2P and the algorithm itself ensure that currency values cannot be artificially manipulated by mass production of bitcoins. Cryptography-based designs allow bitcoin to be transferred or paid only by the real owner. This also ensures the anonymity of currency ownership and circulation transactions. The biggest difference between Bitcoin and other virtual currencies is that its total quantity is very limited and its scarcity.

Litecoin

Similar to Bitcoin, Litecoin and Bitcoin have the same implementation principle in technology. However, Litecoin tries to improve the shortcomings that Bitcoin has shown before, such as slow transaction confirmation, low total limit, large mining pool caused by workload proof mechanism and so on.

Compared with Litecoin, which aims to improve Bitcoin, Litecoin has three significant differences. First, the Litecoin network can process a block every 2.5 minutes (instead of 10 minutes), so it can provide faster transaction confirmation. Second, the Litecoin network is expected to produce 84 million Litecoin, four times the amount of money issued by the Bitcoin network. Third, Litecoin uses the scrypt encryption algorithm first proposed by Colin Percival in its workload proof algorithm, which makes it easier to mine Litecoin on ordinary computers than Bitcoin. Each Wright coin is divided into 100000000 smaller units, defined by eight decimal places.

Dogecoin

Dogecoin s more like a joke. It is a peer to peer currency, creating by a funny idea. Dogecoin was created by programmer Billy Markus from Portland, Oregon, who hoped to create a fun cryptocurrency that could reach a broader demographic than bitcoin. In addition, he wanted to distance it from the controversial history of other coins, mainly bitcoins. But the spirit of entertainment and meme culture made it once the second digital currency in the world. Ironically, people who have not taken part in the Bitcoin wave in recent years see it as an opportunity to make a fortune.