Cryptocurrency (or cryptocurrency or crypto for short) is a digital asset that functions as a medium of exchange and keeps records of individual coin ownership in a book that is a computerized database, using strong cryptography to provide transaction records to control additional coin creation and verification of coin ownership transfers. Usually does not exist in physical form (such as banknotes) and is not usually issued by a central authority. Cryptocurrencies usually use decentralized controls as opposed to centralized digital currencies and central banking systems. When cryptocurrencies are minted or created or issued by a single publisher prior to issuance, they are generally considered centralized. When implemented with decentralized control, each cryptocurrency works with distributed book technology, usually blockchain, which functions as a database for public financial transactions.
See also: History of Bitcoin
In 1983, American cryptographer David Chaum developed an anonymous cryptographic e-money called ecash. Later, in 1995, he implemented it through Digicash, an early form of cryptographic electronic payment that required the user software to extract banknotes and set up a specific encrypted key before it could be sent to the recipient. As a result, digital currencies cannot be traced back to the issuing bank, government or third parties.
In 1996, the National Security Agency published an article entitled “How to Make Coins: Anonymous Electronic Money Cryptography”, which described the crypto currency system. He published it first on the MIT mailing list and then in 1997 in The American Law Review (Volume 46, No. 4).
In 1998, Wei Dai published a description of B-money, which is characterized as an anonymous distributed electronic money system. Shortly thereafter, Nick Szabo explained some gold. Like Bitcoin and other cryptocurrencies that will follow, household gold (not to be confused with gold-based exchange then BitGold) is described as an electronic currency system that requires the user to perform an evidentiary function in order to work cryptographically with a released solution.
The first decentralized cryptocurrency, Bitcoin, was created in 2009 by a developer who allegedly took the pseudonym Satoshi Nakamoto. It uses SHA-256, a cryptographic hash function, in its fail-safe scheme.In April 2011, Namecoin was founded in an attempt to make DNS decentralized, which would make censorship of the internet extremely difficult. Shortly thereafter, in October 2011, Litecoin was released. It uses Scrypt as a hash function, not SHA-256. Another well-known cryptocurrency, Peercoin, uses hybrid performance proof / proof of promise.
On 6 August 2014, the UK announced that the Ministry of Finance had been tasked with studying cryptocurrencies and what role they could play in the UK economy, if any. The review should also report whether regulation should be considered.