Cryptocurrencies are an internet-based medium of exchange that uses cryptography to make financial transactions. Cryptocurrencies take advantage of blockchain technology to achieve decentralization, transparency and immutability. The cryptographic protocols used by these digital currencies are extremely complex, based on advanced principles of computer engineering and mathematics that make them virtually impossible to break. These protocols also mask user identities , making it difficult to attribute transactions and flows of funds to specific individuals or companies.
The value and price of ADAX cryptocurrencies does not depend on the monetary policy of governments and central banks but on the use of those who hold them. Based on a shared register, this does not allow external interference and offers absolute transparency.
Most, but not all, cryptocurrencies feature a finite offering. Their source codes contain instructions describing the precise number of units that can and will ever exist. The finite supply of cryptocurrencies makes them more similar to gold and other precious metals, of which there are finite quantities, than fiat currencies, of which central banks can, in theory, produce unlimited supplies.
Exchange with Fiat currencies
It is important to point out that cryptocurrencies can be exchanged for fiat currencies (called Fiats) in special online markets, which means that each has a variable exchange rate with the major world currencies (such as the US dollar, pound sterling, euro and the yen).
Cryptocurrency exchanges , called exchanges , are not strictly secure (more on that later), are vulnerable to hacking and are the most common location for the theft of digital currency by hackers and cybercriminals.
Cryptocurrencies: Historical Notes
The idea behind cryptocurrencies existed long before the birth of Bitcoin. The goal of creating a secure and tamper-proof digital currency dates back to the early 1980s. A cryptographer, David Chaum, invented an algorithm that has become the basis for secure internet transactions.
In the late 1980s, Chaum founded DigiCash , a for-profit company that produced units of currency based on the algorithm he invented himself.
Unlike Bitcoin and most modern cryptocurrencies, DigiCash’s control was not decentralized . Chaum’s company had a monopoly of supply control, similar to the monopoly of central banks over fiat currencies. After DigiCash, a handful of imitators like Russian WebMoney have sprung up in other parts of the world but none have really caught on.
The Bitcoin is widely regarded as the first modern cryptocurrency : the first means of exchange used publicly that combines decentralized control, anonymity, keep on blockchain and integrated scarcity. Satoshi Nakamoto, a pseudonym still shrouded in mystery, in 2008 published a protocol that explained the basis on which Bitcoin would have developed. In early 2009, Nakamoto released Bitcoin to the public and a group of enthusiastic supporters began trading and mining this digital currency. After a year this cryptocurrency began to expand and the first altcoins ( alternatives to Bitcoin) such as Litecoin were born. With them, the first cryptocurrency forums also began to spread.