How Do Digital Currencies Work?
Digital currencies are electronic money that aren’t denominated by any national currency,
nor are produced by any government-
Many digital currencies are cryptocurrencies, a type of digital currency that relies
on cryptography, as well as a proof-
“Namecoin” is the fourth-
“Primecoin” is interesting in its own right because the mining of this digital currency
actually contributes to society by implementing scientific proof-
One other interesting “altcoin” that is not like Bitcoin and the other digital currencies is “ripple.” Ripple has gained much venture capital from Google Ventures, Andreessen Horowitz, Lightspeed Venture, and other venture capitalists. It acts as a decentralized payment system and exchange to complement other currencies, both virtual and physical.
Digital currencies work by mining those currencies on one’s computer via a “mining” software that brings about the currency. This is recorded in the respective network to show such new units of the currency exist. These coins can go into a person’s digital wallet, then be used to complete transactions. The types of transactions include physical items such as books and video games to digital items such as domain name registration and digital salaries for work performed.
As you can see, there are more digital currencies out there than just Bitcoin, and it seems to be that there will probably be more in the future, both based on current digital currencies and even brand new ones.
As the world continues to become more “digitized” in terms of the Internet and e-