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Cryptocurrency

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Definition Edit

A cryptocurrency is

[a] digital currency that incorporates cryptography, and often has anonymity characteristics. Many cryptocurrencies are decentralized; i.e., no single institution controls the currency.[1]
a math-based, decentralised convertible virtual currency that is protected by cryptography — i.e., it incorporates principles of cryptography to implement a distributed, decentralised, secure information economy.[2]

Overview Edit

"Cryptocurrency relies on public and private keys to transfer value from one person (individual or entity) to another, and must be cryptographically signed each time it is transferred. The safety, integrity and balance of cryptocurrency ledgers is ensured by a network of mutually distrustful parties (in Bitcoin, referred to as miners) who protect the network in exchange for the opportunity to obtain a randomly distributed fee (in Bitcoin, a small number of newly created bitcoins, called the "block reward" and in some cases, also transaction fees paid by users as a incentive for miners to include their transactions in the next block).

Hundreds of cryptocurrency specifications have been defined, mostly derived from Bitcoin, which uses a proof-of-work system to validate transactions and maintain the block chain. While Bitcoin provided the first fully implemented cryptocurrency protocol, there is growing interest in developing alternative, potentially more efficient proof methods, such as systems based on proof-of-stake."[3]

References Edit

  1. Markets for Cybercrime Tools and Stolen Data, at 48.
  2. Virtual Currencies: Key Definitions and Potential AML/CFT Risks, at 5.
  3. Id.

See also Edit

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