Crypto Coins

What is a cryptocurrency ?


Crypto-currencies are virtual, private currencies that allow their holders to purchase certain types of goods or services without having a bank account.

Crypto-currencies (or crypto-assets) account for 0.2% of all transactions (in volume) in the euro area. There are more than 1,600 different crypto-currencies in the world. The three most used crypto-currencies are Bitcoin, Ether and Ripple. Their respective capitalizations are 109 billion euros, 50 billion euros and 22 billion euros.

crypto-currencies are defined by three characteristics:

  • they are virtual currencies, ie digital representations of purely fiduciary value, they are not issued or guaranteed by a central bank or by a credit or monetary institution;
  • they use cryptography: they are designed to transmit value over the Internet in an open and secure environment;
  • they operate in a decentralized system, most crypto-currencies are backed by blockchain technology.

The first crypto-currencies were created as soon as the advent of the Internet but their use only developed with the bitcoin, designed by Satoshi Nakamoto in 2009. Bitcoin records every minute nearly 80 transactions in the world. Nevertheless, this figure remains far from the number of transactions made with Visa and Mastercard payment cards, of the order of 100,000 transactions per minute each.

The appearance of cryptocurrencies has two major aspects:

  • it is a social movement that challenges traditional banks and financial intermediaries, especially since the 2008 crisis;
  • it is a technological progress that makes it possible to operate via a totally secure and totally decentralized network of anonymous transactions between a very large number of participants who do not know each other.

Are crypto-currencies likely to upset the economy based on traditional currencies? In the past, no private currency has managed to persist in time. Nevertheless, in the digital age, while traditional currencies are used in dematerialized form, crypto-currencies could have a different destiny.

Cryptocurrencies, which today number in the hundreds, are increasingly popular digital assets. Thanks to the blockchain and the digital numbering system, they have a real value and can not be duplicated or falsified. All virtual currencies operate on the same principle as bitcoin, but their technologies and of course their prices differ. There are, for example, totally anonymous currencies like Dash that offer increased security and the ability to trade much faster than with bitcoin.

There are currently 1195 cryptocurrencies, 6036 marketplaces, for a total capitalization of about 165 billion dollars. In 2017, bitcoin lost ground and now represents only 56% of the market against more than 90% in 2016. At the time of writing, the ethereum represents 10.79%, followed by bitcoin cash ( 5.36%), and tether (5.03%), but these numbers are very volatile and change continuously.