Digital money: How do cryptocurrencies work?
- Von Welt der Wunder
In 2009, the first digital coins were created – called Bitcoins. Since then, other new cryptocurrencies followed, which received more and more attention thanks to adventurous price developments. Today, nearly 2,000 different currencies are in circulation. We explain how the system behind works.
Dig or buy: How to get cryptocurrency
- After Bitcoin the second most used cryptocurrency worldwide
- Actual name of the currency: ether
- Price: about 505 US dollar
- Ethereum was originally developed as a platform that executes smart contracts
- Originally planned as a network (similar to Ethereum)
- The principle consists of the verification of promissory notes
- No mining possible, output via a digital bank
- Restriction 100 billion
- Price: about 0.5 US dollar
- Price: about 98 US dollar
- Similar network as Bitcoin
- Difference: Faster transaction rate (2.5 minutes intervals, Bitcoin every 10 minutes)
- More security, higher power consumption
How legal are cryptocurrencies?
Estonia even intends to issue its own state cryptocurrency. The so-called Estcoins could be managed directly by the republic. Unlike Bitcoin, this currency would be tied to a central bank. In order for the rest of the world to gain access to the currency, an Initial Coin Offering (ICO) will be introduced to make the exchange for funds possible. Digital currencies are actually bypassing the influence of state and banks, Estcoin could be the first counter-move to an independent payment method.