The Virtual Currencies
Bitcoin is a decentralised currency system that is based on a peer to peer network that is mined through the use of computers by cracking difficult math based equations.
The success of Bitcoin has spurred the launch of other virtual currencies. Altcoins is the name given to the collective currencies.
These other virtual currencies are easier to mine but have a greater risk in terms of lesser liquidity, acceptance and value retention.
The second largest cryptocurrency is Litecoin and was launched in 2011. Litecoin is based on an open source global payment network which is not controlled by a central authority and uses scrypt for a proof of work. This can be decoded with the help of CPUs of consumer grades.
Litecoin has a faster block generation rate as well as more rewards per block when compared to Bitcoin.
This is a more secretive version of Bitcoin. Bitcoin are anonymous to an extent as they still keep a record of all transactions carried out in a ledger which can reveal a lot of information.
Darkcoin offers more anonymity as it operates on a decentralised master code network that makes transactions almost untraceable.
Darkcoin launched at the beginning of 2014 and has had an increasing fan following in a short span of time. Darkcoins are mined through the use of CPU or GPU.
Peercoin was launched in 2012 and was the first digital currency to use a combination of proof of stake and proof of work.
The coins are mined through the commonly used proof or work hashing process but as the hashing difficulty increases over time, users are rewarded with coins by the proof of stake algorithm which requires little energy for generating blocks. Over time the network of Pee4rcoin will consume less energy.
As there is no fixed upper limit on the number of coins, Peercoins is an inflationary currency.
Dogecoin uses scrypt technology as a proof of work scheme. Dogecoin has a block time of 60 seconds and the difficulty retarget time is four hours.
There is no limit to how many Dogecoin can be produced which means the supply of coins will remain uncapped.
Dogecoins deals with larger number of coins that are lesser in value individually which then makes the currency more accessible with a low entry barrier and are good for carrying out smaller transactions.
Primecoin works with a proof of work based on prime numbers which is different from the usual system of hash cash.
Primecoin finds special long chains of prime numbers and offers a greater security and mining ease to the network.