Cryptocurrency

Submission 29,602

About

Cryptocurrency is a digital currency which is generated by users and traded among a network using a variety of cryptography technologies. Cryptocurrencies began trading in 2009, and saw a number of derivative spin-offs towards the end of the following decade, some of them reaching high real world trade values for physical currencies.

History

Need for a digital currency based in cryptography^[2] was proposed in two separate academic papers published in 1993 by researchers at Carnegie Mellon University^[4] and the University of Southern California.^[5] Five years later, Wei Dai published a framework for a digitally traded currency which he called "B-money".^[1] This idea was introduced to the Cypherpunks^[3] mailing list, in which Dai suggested a system where currency would be both regulated and created through crowdsourced cryptography, thus eliminating the risk of double-spending altogether. Dai's idea was later expounded upon by computer scientist Nick Szabo in a blog post titled "Bit gold".^[15]

Online Presence

Bitcoin

Bitcoin is the first virtual cryptocurrency regulated by a peer-to-peer network that creates a time-stamped register yielding chains of valid transactions. This crytocurrency debuted in 2009 after a Japanese American physicist named Satoshi Nakamoto^[12] distributed a paper^[13] solidifying this idea into a nine-page proposal for something called “Bitcoin” via the Cryptography Mailing List.^[14]

In late 2017, the price of a bitcoin soared astronomically, reaching over $17,000 per bitcoin.^[16] This is because financial companies Cboe Global Markets and CME Group, will start offering bitcoin futures in December of 2017.

Ether

Ether is a crytocurrency built on Etherium, a blockchain-based platform, which allows for peer-to-peer "smart contracts." This technology then uses the blockchain to provides a decentralized way to verify and enforce the contracts. Ether is held in the Ethereum wallet, which allows you to create and use smart contracts.^[17]

CryptoKitties

CryptoKitties is a collectible cat-breeding video game built on the Ethereum blockchain computer platform, allowing for digital scarcity. The game allows users to buy, sell, trade and breed digital cats with the intention of collecting the rarest kitties possible. Each kitty has a different set of attributes, with some of those characteristics being rarer than others. Within a week of launching users had already spent more than $6.7 million on the game.

Litecoin

Litecoin is a cryptocurrency similar to bitcoin. However, the main difference between the two currencies is that Litecoin has a greater number of maximum coins, which allows for a psychologial advatage to investors, despite not having any tangible ones, due to the fact that either currency can be divided into nearly infinitesimal amounts. Litecoin is much faster in terms of transactions, processing data in 2.5 minutes compared to Bitcoin's nine minutes.^[18]

IOTA

IOTA is a cryptocurrency built on tangle or Directed Acylic Graph (DAG) chain technology. This allows for more transactions, and as more people use the technology, faster transactions with no transaction fees.

Dogecoin

Dogecoin is an alternative cryptocurrency based on the popular Shiba Inu meme Doge and launched as a satire of the Bitcoin boom in late December 2013. Similar to Bitcoin and its derivatives, Dogecoin can be mined and exchanged for goods and services among the participants, though it is programmed to level out at a higher threshold of up to 100 billion coins and prevent any use of special bitcoin-mining equipment like ASICs.

Coinye

Coinye is an alternative cryptocurrency featuring the face of the American celebrity rapper Kanye West and launched by an anonymous group which aims to simplify the mining process through a front-end platform called “CoinyeMiner” and thus bring cryptocurrency to the masses. Coinye was scheduled to be released for public use on January 11th, 2014, however, the co-founders were forced to abandon the project during the days leading up to the launch, soon after receiving a cease-and-desist letter, followed by the subsequent filing of a trademark infringement suit.

RonPaulCoin

RonPaulCoin is an alternative cryptocurrency featuring the face of the retired libertarian congressman Ron Paul and based on Litecoin’s SCRYPT-based protocol. In comparison to other leading alternative cryptocurrencies, RonPaulCoin is decisively limited in its scope and circulation volume with a market threshold of up to 2.1 million coins, about one tenth of Bitcoin's 21 million cap.

NyanCoin

NyanCoin is an alternative crypto currency which uses the cartoon Internet meme Nyan Cat as its mascot. On January 2nd, 2014, two different cryptocurrencies named "NyanCoin" were launched on the same day, though one of them quickly fell out of favor after it was accused of having been pre-mined, or the often-deceptive practice of allocating a certain portion of the currency's total volume to the founders or early adopters prior to its public release. By January 6th, Nyan Cat creator Chris Torres had officially endorsed the non-premined version and the founders of the currency announced their partnership with Torres for the first “officially licensed cryptocurrency" in the BitCoin Talk Forums.^[8] Powered by the Scrypt algorithm, the official licensed NyanCoin has a total of 337,000,000 coins with 337 coins per block and a difficulty retarget time of three hours.

On January 13th, the /r/NyanCoin^[9] subreddit was launched for discussions regarding the altcoin. On January 23rd, The Register ^[10] published an article about the new cryptocurrency. On January 27th, The Daily Dot^[1] published an article outlining the history of NyanCoin, which included statements from Torres and the NyanCoin creators.

Bitcoin Cash

On August 1st, 2017, a hard fork of Bitcoin led to the creation of Bitcoin Cash (BCH), which increased the block size limit of the cryptocurrency from one to eight megabytes in size. On December 12th, 2017, the Swedish tech site Breakit^[20] published an interview with Bitcoin.com cofounder Emil Oldenburg, who revealed he was selling all of his bitcoin tokens and replacing them with BCH, claiming "Bitcoin is virtually unusable." That evening, the cryptocurrency exchange Coinbase^[21] announced they would be adding BCH to their exchange, allowing users to buy, sell, send and receive the cryptocurrency. In the hours prior to the announcement, the price of Bitcoin Cash increased substantially, leading some to speculate that insider trading had occurred. The following day, Coinbase co-founder and CEO Brian Armstrong published an article acknowledging the price increases, claiming that the company would be investigating and terminating any employees who violated their policies.^[22]

"Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter. If we find evidence of any employee or contractor violating our policies -- directly or indirectly -- I will not hesitate to terminate the employee immediately and take appropriate legal action."

On December 20th, Redditor joyelectricboy submitted a post to /r/Bitcoin^[24] speculating that CNBC Marketing Manager Gaby Wasenstein was colluding with Bitcoin Cash. That day, the cryptocurrency blog Bitcoinist^[23] published an article about the controversy title "Evidence Emerges of CNBC Collusion with Roger Ver, BCASH."

Highlights

Silk Road

Bitcoins are the only currency accepted on Silk Road, an online black market that can only be accessed via The Onion Router (TOR). Though the site launched in February 2011, the site did not receive mainstream attention until Gawker^[7] published an expose on it in June of that year. Silk Road allows people to buy a number of items including drugs, apparel, books, digital goods, drug paraphernalia, erotica and forgeries. In July 2012, it was estimated^[6] that more than 1.2 million dollars US in sales were being generated monthly by the site.

Twitter Crackdown on Crypto Scanners

On February 1st, 2018, Ethereum co-founder Vitalik Buterin tweeted,^[25] "If you send me 0.1 ETH, I will send you nothing, because I am too lazy." The tweet (shown below, left) was a joke and received more than 2,400 retweets and 14,000 likes.

After this tweet, a variety of fraudulent accounts using Buterin's name began tweeting to send them ether. They tweeted (shown below, center),^[26] "But if you send me 0.2 ETH, I will send 2 ETH back to your address, because I can. My address: 0xCDDd354cd8550c5E30eaB2d63cDC48156a344f0A Beware of fakes!"

Due to the constant people asking for the ETH, on March 4th, Buterin changed his Twitter name to "Vitalik 'No I'm not giving away ETH' Buterin" and tweeted,^[27] "No, I'm not giving away ETH." The post (shown below, right) received more than 1,100 retweets and 7,000 likes in four days.

Twitter has announced that they have begun taking steps to curb this behavior. On March 8th, the company told The Verge,^[28] "We’re aware of this form of manipulation and are proactively implementing a number of signals to prevent these types of accounts from engaging with others in a deceptive manner."