Cryptocurrency

Cryptocurrency refers to a math-based, decentralized convertible virtual currency that is protected by cryptography, i.e., it incorporates principles of cryptography to implement a distributed, decentralized, secure information economy.

Cryptocurrency relies on public and private keys to transfer value from one person (individual or entity) to another, and must be cryptographically signed each time it is transferred. The safety, integrity and balance of cryptocurrency ledgers are ensured by a network of mutually untrusted parties (in Bitcoin, referred to as miners) who actively protect the network in a proof-of-work system by maintaining a high hash-rate difficulty often in exchange for the opportunity to obtain a randomly distributed fee (in bitcoin, a small number of newly created or mined bitcoins). Dozens of cryptocurrency specifications have been defined, most derived from Bitcoin as the first fully implemented cryptocurrency protocol. (See Definition of cryptocurrency, PC Magazine Encyclopedia)

De-centralized Virtual Currencies

De-centralized Virtual Currencies (a.k.a. crypto-currencies) are distributed open-source, math-based peer-to-peer digital currencies that have no central administrating authority, no central third-party transaction ledger, and no central monitoring or oversight. Examples: Bitcoin and LiteCoin.

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See Also

• Virtual Currency
• Artificial Currency Unit
• Bitcoin
• International Currency
• Currency Convertible In Fact
• Functional Currency
• Convertible Virtual Currency
• Hard Currency
• Exotic Currency
• Reserve Currency
• Soft Currency
• Fiduciary Currency

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