As personal banking evolves with the demand for security and flexibility, digital banking in the form of Cryptocurrency has come into the spotlight. Think tanks, like Chaincode, are shining the light on this revolutionary currency, and they might just convince us to abandon our current banks and start using Bitcoin. While the digital banking revolution is happening, some of us are still trying to figure out what Chaincode is or why it’s called a think tank and that’s only if we can wrap our minds around a Cryptocurrency. Let us walk you through the fundamentals of Cryptocurrency think tanks and how Chaincode could be the best thing that ever happened to digital banking. Cryptocurrencies and Think Tanks Cryptocurrency is a decentralized form of banking that allows for peer-to-peer transactions without the need for any formal method of payment. Cryptocurrencies like Bitcoin allow for rapid transactions, complete anonymity, and no credit card fees. The worth of Cryptocurrency is dependent on the users; the more people who own Bitcoin, and use it as a standard currency, the more credibility it has. To get more people involved, advocacy groups (think tanks) are forming to promote the use of Cryptocurrencies with the goal to get enough people involved to make it a standard. Think Tanks are generally non-profit organizations that are sponsored by donations and focus on endorsing new technologies or ideas. Cryptocurrency think tanks will often host events, publish articles, or promote projects that spread the word on the utility of Cryptocurrencies. Chaincode and Bitcoin One of the more anticipated Cryptocurrency think tanks pushing forward the Bitcoin revolution is Chaincode. Founded by Alex Morcos and Suhas Daftuar, Chaincode’s goal is to “develop technology and perform research to further the field of digital currencies.” The organization is hiring a team of engineers to create and develop software that will commercialize the use of cryptocurrencies, allowing for more people to adopt Bitcoin over conventional banking methods. Chaincode proved their dedication to Cryptocurrency by investing in two MIT students who plan to give away Bitcoin for free. Dan Elitzer and Jeremy Rubin will be giving away $100 to every undergraduate student at MIT to use however they want. They hope the opportunity to use Bitcoin will spark enough interest in students to make them transition to Cryptocurrency. By funding new projects and programs that shed light on Bitcoin’s practical applications, Cryptocurrency think tanks might launch us into a new world of banking. General skepticism surrounding Cryptocurrencies is holding people back from the transition, but think tanks like Chaincode could give Bitcoin another chance at becoming the new digital wallet. What do you think about Cryptocurrency think tanks like Chaincode? Will you be making the transition to Bitcoin? [zipfinder] Photo: Flickr Find Ryann on Google+ Digital currency is a form of electronic money, considered to be a type of alternative currency. These currencies are not supported by any bank in the world. Even so, digital currency can be used to purchase real goods and services, over a strictly peer-to-peer network. They can be purchased with real money, and are seen as an investment to many. You can also “mine” digital currency, by using your computer to help decode “blocks.” This process can take long periods of time, and many have questioned its worth. Lost yet? The world of digital currency can be confusing. The easiest way to explain it is as an investment, like purchasing a stock or commodity. There are many different types of digital currencies, but the two main ones are Bitcoin and Litecoin.

Bitcoin

No one knows for certain who created Bitcoins. The name Satoshi Nakamoto is used when talking about whoever did create the digital currency, even though it is not linked to one single person. Even with such a shady background, Bitcoins have become very popular. Owning them does have both positives and negatives, however. Pros: Bitcoins can be a great investment. For those who invested in the early days of Bitcoins, they were able to cash out with ridiculous profits. They started out valued at less than $10, even worth only a few cents at one point. At times, Bitcoins have now been valued over $200. Some who invested early and often have been able to cash out as millionaires. Not bad for some invisible currency. The supply of Bitcoins is also limited. The founder set up the algorithm to stop the “production” of Bitcoins once it hits 21 million. This limited supply ensures the value of bitcoins will remain high. Cons: As rewarding as they can be as an investment, they can be just as risky. There have been times where Bitcoins value has changed $100 in a single day. Bitcoin value has also gone from dollars to pennies in seconds. So investing in this alternative currency isn’t exactly for the faint of heart. Governments may start cracking down on underground currency, which could potentially cripple its value. Another issue? Bitcoins aren’t exactly accepted like your Visa card. There are a very limited number of businesses that take Bitcoins. So unless the item you want can be purchased with Bitcoins, you may not find much use for them.

Litecoin

Litecoin is very similar to Bitcoin. Google Software Engineer Charles Lee created Litecoin based on the same principles as Bitcoin. He created it because he, “wanted to create something that is kind of silver to Bitcoin’s gold.” Even though Litecoin is similar to Bitcoin, it has its own pros and cons. Pros: Released towards the end of 2011, Litecoin has seen its value steadily increase, but still remains at a low risk price. It opened 2013 with a value of $0.07, and as of August, Litecoins are now worth $2.40 a piece. That’s over a 3000% return for early investors. If Litecoin can keep growing steadily, it can become the next big thing in digital currency. Litecoin is also a more stable alternative currency compared to many other Bitcoin impersonators. Other alternative currencies have been labeled as scams, just taking peoples money and shutting down. Litecoin, however, has a trustworthy creator, and a solid foundation. Cons: While Bitcoins aren’t redeemable in a lot of places, Litecoin has even fewer options. So while it may look like a good investment, it may never be as popular as Bitcoins. That will hurt its value overall. Litecoin also admittedly will never be worth more than Bitcoins. Charles Lee has said 84 million Litecoins will be produced. That is 63 million more than Bitcoins, which will decrease its value in the long run. So if people are looking to invest in Litecoins, they have to understand it probably will not take off quite as well as Bitcoins.

The Rest

Most digital currencies have been developed to mimic Bitcoin. Since Bitcoin’s release, 42 other cryptocurrencies have been created, all hoping to ride the success Bitcoin has created. While they follow the same principles, none of these other currencies have seen the popularity that Bitcoin has received. The next most popular digital currencies after Bitcoin and Litecoin are Namecoin and PPcoin. Neither comes close to rival the top two currencies. While the road ahead for digital currency is still shaky, there is no doubt that is has caught the attention of many. But will the bubble continue to grow, or will it burst? Only time will tell. Photo by BTC Keychain
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