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The rise of Crypto currency and the types of crypto currencies that available, Essays (university) of Global Economics

University of CalicutGlobal Economics

An overview of cryptocurrency, focusing on the decentralized nature of cryptocurrencies and their advantages over traditional banking systems. It then delves into two specific cryptocurrencies, Ripple and Litecoin, providing information on their unique features, benefits, and use cases. The document also discusses how Ripple and Litecoin can be used for cross-border payments, remittances, trading, and micropayments. Finally, it highlights the risks associated with investing in cryptocurrencies.

Typology: Essays (university)

2021/2022

Available from 03/17/2023

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The Rise of
Cryptocurrency
Cryptocurrency is a digital or virtual currency that uses cryptography for security and operates
independently of a central bank. Cryptocurrencies use a decentralized system, meaning they
are not controlled by any central authority like a government or financial institution. Instead,
they rely on a network of users who collectively validate and maintain the integrity of the
currency and its transactions.
One of the key advantages of cryptocurrencies is their decentralized nature, which allows for
greater privacy and security compared to traditional banking systems. Transactions on the
blockchain are verified by a network of users, making it difficult for any one person or entity to
manipulate the system. Cryptocurrencies also offer faster and more efficient transactions,
particularly for cross-border payments, compared to traditional banking systems, which can
take days or even weeks to process international transfers
There are many types of cryptocurrencies:-
1. Bitcoin (BTC): The first and most well-known cryptocurrency, Bitcoin is a decentralized
digital currency that operates on a peer-to-peer network.
2. Ethereum (ETH): A decentralized platform for building smart contracts and
decentralized applications, with its own cryptocurrency called Ether.
3. Ripple (XRP): A real-time gross settlement system, currency exchange and remittance
network that uses a consensus ledger to validate transactions.
4. Litecoin (LTC): A peer-to-peer cryptocurrency that operates on an open-source network
and has a faster transaction confirmation time than Bitcoin.
5. Stellar (XLM): A decentralized platform that enables fast and low-cost transactions, with
its own cryptocurrency called Lumens.
Ripple (XRP):-
Ripple (XRP) is a cryptocurrency that operates on a real-time gross settlement system,
currency exchange, and remittance network. It was created in 2012 and is designed to provide a
fast and secure way to transfer funds globally. Ripple is unique in that it is primarily targeted
towards financial institutions such as banks and payment providers, rather than individual
users.
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The Rise of

Cryptocurrency

Cryptocurrency is a digital or virtual currency that uses cryptography for security and operates independently of a central bank. Cryptocurrencies use a decentralized system, meaning they are not controlled by any central authority like a government or financial institution. Instead, they rely on a network of users who collectively validate and maintain the integrity of the currency and its transactions. One of the key advantages of cryptocurrencies is their decentralized nature, which allows for greater privacy and security compared to traditional banking systems. Transactions on the blockchain are verified by a network of users, making it difficult for any one person or entity to manipulate the system. Cryptocurrencies also offer faster and more efficient transactions, particularly for cross-border payments, compared to traditional banking systems, which can take days or even weeks to process international transfers

There are many types of cryptocurrencies:-

  1. Bitcoin (BTC): The first and most well-known cryptocurrency, Bitcoin is a decentralized digital currency that operates on a peer-to-peer network.
  2. Ethereum (ETH): A decentralized platform for building smart contracts and decentralized applications, with its own cryptocurrency called Ether.
  3. Ripple (XRP): A real-time gross settlement system, currency exchange and remittance network that uses a consensus ledger to validate transactions.
  4. Litecoin (LTC): A peer-to-peer cryptocurrency that operates on an open-source network and has a faster transaction confirmation time than Bitcoin.
  5. Stellar (XLM): A decentralized platform that enables fast and low-cost transactions, with its own cryptocurrency called Lumens. Ripple (XRP):- Ripple (XRP ) is a cryptocurrency that operates on a real-time gross settlement system, currency exchange, and remittance network. It was created in 2012 and is designed to provide a fast and secure way to transfer funds globally. Ripple is unique in that it is primarily targeted towards financial institutions such as banks and payment providers, rather than individual users.

One of the main benefits of Ripple is its fast transaction confirmation time, which is typically around 4 seconds. This makes it much faster than traditional payment methods, which can take days to settle. Ripple also has low transaction fees, which can make it an attractive option for those looking to transfer funds internationally. It aims to provide a fast and secure way to transfer funds globally, and is designed for use by financial institutions such as banks and payment providers. Here are some examples of how Ripple works:

  1. Cross-border payments: Ripple can be used to facilitate cross-border payments, allowing financial institutions to transfer funds in different currencies quickly and at a lower cost than traditional methods. For example, a bank in the US could use Ripple to send money to a bank in Japan, and the transaction would be settled in a matter of seconds.
  2. Remittances: Ripple can also be used for remittances, allowing people to send money to friends and family in other countries quickly and easily. For example, someone in the US could use Ripple to send money to a relative in Mexico, and the transaction would be settled almost instantly.
  3. Trading: XRP can be used for trading on cryptocurrency exchanges, where it is often used as a base currency for other cryptocurrencies. For example, someone could use XRP to buy Bitcoin or Ethereum on a cryptocurrency exchange.
  4. Micropayments: Ripple can also be used for micropayments, allowing for small transactions to be made quickly and at a low cost. For example, someone could use XRP to pay for a digital download or subscription service. Litecoin (LTC):- Litecoin (LTC) is a peer-to-peer cryptocurrency that was created in 2011 by Charlie Lee, a former Google engineer. It is similar to Bitcoin in many ways, but has some key differences, such as a faster transaction confirmation time and a different mining algorithm. Litecoin has gained popularity as a cryptocurrency for online transactions, as many online merchants now accept it as a form of payment. It is also used for investment purposes, with some investors buying and holding Litecoin as a long-term investment. However, it's important to note that investing in cryptocurrencies can be risky and there is no guarantee of a return on investment.

Litecoin is used as,

1. online transactions:- Many online merchants accept Litecoin as a form of payment, and users can also use it to send money to other individuals 2. investment purposes:- Like other cryptocurrencies, Litecoin's value can fluctuate rapidly, and some investors see it as a way to potentially earn a profit by buying and selling at the right time.