A crypto money (or crypto currency) is a digital presence designed to work as a medium of replacement that uses strong cryptography to secure financial transactions, control the formation of additional units, and verify the transfer of presences. Crypto moneys use decentralized control as opposed to centralized digital currency and central banking systems. The decentralized control of every crypto money works by distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.
Bitcoin, first released as open-source software in 2009, is generally considered the first decentralized crypto money. Since the release of bitcoin, over 4,000 altcoins [alternative version of bitcoin or other crypto moneys (crypto currencies)] have been created.
Formal Definition of Crypto Money
In Jan Lansky’s opinion, crypto money is a system which meets six conditions:
- The system doesn’t necessitate a central authority, its state is maintained through distributed consensus.
- The system keeps an overview of crypto money units and its ownership.
- The system defines whether new crypto money units can be created. If new crypto money units can be created, the system defines the circumstances of their origin, and how to determine the ownership of these new units.
- Ownership of crypto money units can be proved only crytographically.
- The system allows transactions to be performed in which ownership of the cryptographic units is altered. A transaction statement can only be issued by an existence proving the current ownership of these units.
- If two different directives or altering the ownership of the same cryptographic units are entered at the same time, the system performs at the most one of them, no both of them. In March 2018, the word crypto money was added to the Merriam-Webster-Dictionary.
The term altcoin has different similar definitions. Stephanie Yang of The Wall Street Journal defined the altcoins as “alternative digital currencies,” while Paul Vigna described altcoins as alternative variants of bitcoin. Aaron Hankins of the MarketWatch refers to any crypto money other than bitcoin as altcoins.
A blockchain account can supply functions other than making payments, for instance in decentralized applications or smart contracts. In this case, the units or coins are sometimes adverted as cryptotokens (or crypto tokens).
As a result, we have told that definition of cryto money and some forms of it. If you have some questions about it, this article will help you.