A digital cryptocurrency (or crypto currency) is a digital token (medium) of exchange that is meant to be used for various types of online transactions. Cryptography is used to validate and secure the transactions as well as to regulate the numbers of the particular cryptocurrency that is available for use at any point in time.
A complex computer encrypted code called a private signature key (psk) is combined with an equally complex computer encrypted code called the public key (pk) to control the 'proper use' of a cryptocurrency.
The private key identifies ownership of the cryptocurrency. Cryptocurrencies can be stored in your own computer, a portable storage devise or even written down on paper, however, if you wish to use them in online or real world transactions, you'll have to move them online to an electronic storage facility generally referred to as a "wallet". These "wallets" are usually provided for profit by companies who are not necessarily the same companies who created the particular cryptocurrency.
Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies. The most well-known cryptocurrency to date is Bitcoin.
Bitcoin was created in 2009 by one or more persons going by the false name of Satoshi Nakamoto. Bitcoin is considered by many to be the first decentralized cryptocurrency. Since then, numerous cryptocurrencies have been created - each claiming to be better than the other. Currently over a thousand cryptocurrency specifications exist.
Cryptocurrencies are frequently called altcoins (alternative coins) and can exist in both centralized and decentralized forms. The centralized form is generally more difficult to support as it generally requires the creator to act in the capacity of a buyer of last resort. Bitcoin and most of the cryptocurrencies available now are in decentralized form and are supposed to be self-regulated through the computer code used to create them.
Cryptocurrencies were originally created for the more convenient settlement of online, electronic transactions on a cashless basis. However, bitcoin and in particular some newer cryptocurrencies have become popular investments as well. People who purchased some of these newly launched cryptocurrencies when they were first released, have seen their investments appreciate by thousands of percentage points.
However, for any cryptocurrency to really be able to replace cash, it has to have certain key features. Our research has revealed the following features a must in order for any Cryptocurrency to be widely acceptable:-
