A cryptocurrency is a digital currency used for buying Goods And Services while using cryptography computing method to secure transactions and control the formation of additional units of the currency. They are regarded as alternative currencies to traditional currencies such as the Dollar and the Euro. Bitcoin was the first cryptocurrency to be introduced. Cryptocurrencies mimic precious metals because their production gradually decreases as there is a cap on their circulation numbers. Mining by miners validate transactions of the currencies currently being used in supply and thus generating new units of the currencies.

One can also obtain them by purchasing them. These coins are mostly preferred because one can use them to buy goods and services anonymously. They are thus commonly used in illegal online activities.

Top 7 most valuable cryptocurrencies by market capitalization

Bitcoin (XBT): A man by the name Satoshi Nakamoto is believed to be behind the creation of Bitcoin on January 3rd, 2009. The current Market Capitalization of Bitcoin is $ 23.5 billion; its current price is $1992.43 while 16.3 million bitcoins are currently in circulation.

Ethereum (ETH): Etherium was introduced on July 30th, 2015; its current market capitalization is $13.5 billion, its current price is $146.8 while close to 92 million Ethereums are currently in supply.

Ripple (XRP): Ripple was released by Authur Britto, Ryan Fugger and David Schwartz in 2012. Its market capitalization is $7.9 billion; its current price is $0.209 while about 34 billion Ripples are currently in supply.

NEM (XEM): NEM's current market capitalization is $1.4 billion; its current price is $0.157 while over 9 billion NEMs are currently in circulation.

Ethereum Classic (ETC): Ethereum classic has a market capitalization of $1.4 billion; its current price is $12.64 while only 92 million units of the digital currency are currently in circulation.

Litecoin (LTC): Litecoin was introduced on October 5th, 2011 by Charles Lee, a former Google employee. Its current market capitalization is $1.1 Billion; the price of one Litecoin is $21.85 while 51 million Litecoins are currently in circulation.

Dash (Dash): Dash was formerly known as Darkcoin and XCoin. It was introduced on January 18th, 2014. Its current market capitalization is 718 million; its current price is $98 while 7.3 million Dash coins are currently in circulation.

Why one should think twice before speculating on any cryptocurrency

45 percent of online exchanges that sell and buy cryptocurrencies fail and disappear with clients money according to research done in 2013. Alan Greenspan, a former federal reserve chairman, and economist John Quiggin called such currencies as a speculative bubble because of how many they are. Warren Buffett warned investors against investing in such currencies while several people that have worked with such currencies have warned that bubbles may occur. The central bank of Estonia once called the currencies Ponzi schemes. To date, there are about 1,000 cryptocurrencies in circulation.