Discussions about cryptocurrencies have officially moved from niche internet forums to the front pages of every newspaper, the meeting rooms of top corporations and family living rooms around the world. While most people are now familiar with the word Bitcoin and maybe even Bitcoin Cash, Ethereum or Litecoin, they don’t always know the fundamentals that power them, let alone the differences between them. Before embarking on the exciting world of using, storing and trading these cryptocurrencies, it is essential to have a fundamental understanding of what they are and how they work
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Bitcoin (BTC) is the cryptocurrency that put blockchain on the map. Created by an unknown person or group known only as Satoshi Nakamoto, its meteoric rise in value not only produced numerous billionaires, it also brought blockchain into the public conscience. It is the most frequently traded and discussed cryptocurrency, and an obvious place to start when discussing cryptocoins.
Bitcoin It is the fundamental currency for the Bitcoin blockchain (a decentralized ledger that stores information as immutable blocks). A small amount of Bitcoin is required to perform all transactions (sending, receiving) on the Bitcoin blockchain. The people that approve those transactions are known as “miners” and they receive that small amount of Bitcoin for their work.
While originally intended to only have use within the system, Bitcoin quickly became a viable currency in its own right, valued for its inherent security, transparency, and independence. Bitcoin can now be used to purchase goods and services, as well as be saved as an asset. It is also the standard coin used for purchasing other cryptocurrencies.
Bitcoin Cash (BCH)
Bitcoin Cash (BCH) is a separate cryptocurrency that came into existence in August 2017, following a “hard fork” on the Bitcoin blockchain. A hard fork occurs when there is a fundamental change or upgrade to part of a blockchain. The change means that future blocks of stored data are no longer compatible with previous ones. Hard forks typically result from differing opinions of miners and users regarding aspects of a blockchain’s structure, programming, and maintenance.
In regards to Bitcoin Cash, separate factions disagreed about how to address the fact that Bitcoin’s storage blocks are capped at one megabyte. This restriction produces what is known as a scalability problem – if a transaction is larger than one-megabyte it requires multiple blocks to complete and thus an increase in processing times and transaction costs. Different solutions, each with benefits and risks have been proposed to address the issue. Bitcoin Cash is the result of one implemented solution.
A small group of miners (approx. 3% of total Bitcoin miners) under organized supervision decided to increase the blockchain’s block sizes from 1mb to 8mb. The resultant chain was no longer compatible with the previous chain, and thus a hard fork had taken place. Bitcoin could no longer power transactions on this new chain. A new currency was necessary – thus Bitcoin Cash was born.
Bitcoin Cash, in general, functions very similarly to Bitcoin, but thanks to its larger block sizes, it offers faster and cheaper transactions and more incentives for miners. It has steadily increased in value and has been added to an increasing amount of exchanges. Bitcoin Cash is still, however, less widespread than original Bitcoin and is used in fewer places. For example, it cannot be used to purchase as many goods or services or other cryptocurrencies.
Ethereum is the second most visible blockchain in the world and expected by many to someday eclipse Bitcoin in prominence. Ethereum was proposed in late 2013 by Vitalik Buterin, a cryptocurrency researcher, and programmer. It functions in largely the same ways as Bitcoin’s blockchain, with the exception that it includes smart contracts. Smart contracts are secure and transparent transactions that can be autonomously executed if certain criteria are met. Like Bitcoin, the Ethereum blockchain requires a currency to perform all transactions, which in its case is known as Ether or sometimes simply Ethereum.
Ethereum further distinguishes itself thanks to its unique programming language, Turing complete, which runs on the blockchain and allows developers to build and publish distributed applications (DApps). The DApps enable users to facilitate blockchain-based interactions including sending and receiving data and information reliant on smart contracts.
Like Bitcoin, Ether has become an asset commodity in its own right with a large and dedicated community of traders. While required to fuel DApps and all Ethereum blockchain transactions, Ether also holds value akin to other fiat currencies.
Another of the most visible cryptocurrencies is Litecoin (LTC). It was created in 2011 by former Google employee Charlie Lee in response to Bitcoin’s excessive transaction times, large fees, and concentrated mining pools. Like Bitcoin, Bitcoin Cash and Ethereum, Litecoin is the currency needed to fuel transactions on its unique and independent blockchain.
Litecoin functions fundamentally the same as Bitcoin. Its most significant differences include transfer speeds and the underlying algorithms that power the transfers. Litecoin blocks can be laid (and thus transactions performed) at a fraction of the time it takes to create a Bitcoin block. Moreover, the Litecoin blockchain relies on a different cryptographic algorithm than Bitcoin that makes it easier to place blocks and is thus more appealing for miners to use. It currently has a much smaller user-base and value than either Ethereum or Bitcoin, but thanks to its strengths, nonetheless promises to be an important cryptocurrency going forward.
NEO and GAS
NEO is one of the newer smart contract blockchains, but has been attracting positive attention since its mid-2017 rebranding from Antshares which was first launched in 2014. It was founded in China by Da Hongfei and is largely understood to be integrating with the government as it’s stance on cryptocurrencies evolves.
The NEO blockchain has two cryptocurrencies associated with it: NEO and GAS. GAS tokens, which are staked from NEO tokens, serve as the necessary payment to motivate transactions and deploy Smart Contracts. Holding NEO results in an accumulation of GAS tokens. If one considers NEO to be a stake in the blockchain itself, GAS is the utility that powers that blockchain.
The NEO blockchain can be most easily compared to Ethereum in terms of aims and functions. Much the way Ethereum allows for DApps thanks to Smart Contracts, NEO uses Smart Contracts to allow for programs to be written atop it. In this way, the blockchain supports a smart economy. In addition to its unique relationship with a specific government, the major difference between NEO and blockchains such Ethereum involves identity. While Bitcoin and Ethereum value anonymity, NEO claims greater capability for identity verifications and compliance.
How Infinito Wallet Lets You Take Advantage
Because Bitcoin, Bitcoin Cash, Ethereum, Litecoin, NEO and GAS all have different strengths as well as supporting communities, it is impossible to know exactly what the future holds for them. It is unlikely that any one will become the sole cryptocurrency used throughout the world. Rather, they are likely to all exist in different capacities for different purposes. There is, therefore, reason people would want to keep and use each.Because BTC, BCH, LTC, ETH, NEO are all on separate blockchains, they cannot be stored at the same wallet address. BTC sent to a BCH address, for example, will disappear, possibly never to be retrieved. Until recently, an entirely different wallet with a single address was needed to store each. Having numerous wallet applications inevitably cluttered up phones and computers and because each wallet required its own password, having multiple wallets increased the chances that one would be hacked or its password forgotten.
Infinito Wallet addresses these problems by being able to store, send and receive BTC, BCH, LTC, NEO, GAS, DASH, DOGE. It also allows for storage of the thousands of available ERC20 tokens (on Ethereum Blockchain) and NEP5 tokens (on NEO Blockchain). And as new coins emerge and prove themselves, Infinito Wallet will evolve to allow for their storage and transfer as well. This universal wallet contains separate addresses for each, all within a single intuitive and user-friendly app. Users can effortlessly switch between the coins without needed to switch accounts, passwords or passphrases.
While some other wallets do now allow for the storage of numerous coins, Infinito Wallet further distinguishes itself with additional security functions such as touch-screen lock, password protection, private key encryption and core features including downloadable transaction memos, contact lists, and numerous languages.
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About Infinito Wallet
Positioning as a leading universal wallet for crypto users, Infinito Wallet serves as a gateway for users to maximize usage and potentials of their cryptocurrencies. By selectively expanding our partner network, Infinito Wallet aims to build an ecosystem of practical blockchain services including exchanges, ID/KYC solutions, and other blockchain-related business services. At the same time, we help support communities of developers and businesses with an open blockchain infrastructure of technologies and compliant-ready services, so that they can seamlessly build, launch, and operate innovative products and services efficiently.
Infinito Wallet’s core development team of blockchain R&D experts has intensive professional experience. Currently, our organization consists of more than 300 members including developers, designers, business and marketing specialists. We are promoting research on infrastructure for cryptocurrencies and developers utilizing blockchain.
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