Electronic payment systems and digital currencies are growing in popularity and use. Digital currencies like Bitcoin offer advantages like low transaction fees, anonymity, and lack of centralized control but also risks like volatility and lack of consumer protections. There are over 300 different cryptocurrencies that differ in features like transaction irreversibility, emission limits, and mining processes. The top currencies are Bitcoin, Litecoin, and Peercoin, with Bitcoin dominating the market. Cryptocurrencies provide near zero-cost international transactions without intermediaries but also come with drawbacks like inability to recover funds with unscrupulous users.

1. 1.Science does not stand still, modern technologies allowed to store money on electronic
media and accounts, using them at the right time. Developed network payment systems (QIWI,
Webmoney and others) allows you to purchase goods, works and services for "Electronic money"
without leaving home. In recent years, the market of electronic payments is steadily growing, both
the number of transactions and the amount of money processed by payment services are increasing.
Electronic payment systems include electronic access to current accounts and electronic
money systems. Electronic access systems use various electronic means of communication to gain
access to payment services using closed banking or open telecommunications networks, in
particular the Internet. Electronic money is a form of credit money, represented in the form of units
of value, stored electronically on a technical device and performing in aggregate functions of a
measure of value, means of circulation, payment and accumulation, as well as the function of the
world money .Of course, these resources save time and are convenient to use, and therefore are
widely used throughout the world. In fact, with help of payment systems we transfer cash monetary
units to electronic, using for national payments, transfers and other operations in a national
currency. However, series of crisis phenomena undermines public confidence in national money.
Not having no real value, the trust in such money and the issuer issuing them is one of the reasons
for not using money. In turn, all national currencies have tendency to reduce its purchasing power
(depreciation). Trying to change Inflationary nature of money, the more popular become alternative
monetary systems.
2.First thoughts about creating an independent digital currency are dated 1992. That year,
Timothy May, a former Intel physicist, invited his friends to a house in Santa Cruz to discuss the
prospects for the development of the Internet. By this time, Whitfield Diffie has already created
cryptography with open key, and Philip Zimmermann (PGP-encryption for e-mail). May said that it
would be nice to create an independent anonymous currency that "fundamentally changes the
structure of corporations and removes the state from participating in financial transactions."
The first May’s idea was developed by the former Intel engineer Jim Bell (Jim Bell), who

2. developed the concept of the Exchange of Political Killers. He thought that if people had the
opportunity to collect money anonymously, they would be able to accumulate money for removal of
public figures who they are dissatisfied. In the end, the idea of Bell and himself became interested
by law enforcement agencies, and the exchange was never launched.
In parallel, other people thought about the technical aspects of the cryptocurrency. In 1998,
a graduate of the University of Washington, Wei Dai (Wei Dai) offered B-money. "My idea was to
create a free financial system on the Internet. So that no one could impose taxation and force people
to do anything» he explained. However, B-money was a concept, not a practical implementation.
About the same time, the programmer Nick Szabo was interested by the idea of creating a digital
currency from scratch. That is why Bit Gold was created, which many consider predecessors of the
famous Bitcoin today, although anonymity was not their feature. All these questions remained
unresolved until the concept of Bitcoin, proposed by the mysterious figure Satoshi Nakamoto, who
came from nowhere, appeared in 2008. He decided to build a chain of information about
transactions. In 2010, Nakamoto left the project, and since 2011 his footprints on the Internet have
been lost, although information appears periodically that he was discovered. It is assumed that
Nakamoto owns 1 million bitcoins. According to the rate for March, 2017, this is equivalent to a 1.2
billion dollars.
First of all, the prospects for the development of crypto currencies were considered by start-
upers, then the shadow business was tightened due to anonymity and lack of supervision and
control.Some exchanges can say that their trading capitalization in the digital money accounts in
billions. And the volumes only grow every year. It is also worth noting that the trade in
cryptocurrencies attracts also because trading cryptocurrencies is very difficult to lose everything
because it is possible to diversify their purchases, and so the crypto currency does not fall to
become bankrupt. It is also important to mention that by 2040 it is said that there will be limited
opportunity to mine, and, consequently, the limited production can further spur the price of BTC.
But mining is not a cheap pleasure, the costs are growing every year, and mining is becoming more

3. difficult and less. Perhaps, after that, other basic crypto currencies will also grow. So it's too early to
speak about cheapening of the crypto currency.
Mining is the production of crypto currency like bitcoin or lightcoin as a result of decoding a
certain number of blocks. Direct decoding of blocks is made by various computing powers, which
can be both home computers and specialized mining computers.It is possible to create Bitcoin and
any other crypto currency both independently and with the help of unique pools that unite the
miners into a single whole and distribute the extraction between the «miners".
3.Each digital currency in comparison with others differs in the way of receiving and the the
functions that are used for calculation. The main characteristics for determining the type of crypto
currency can be listed in the following list:
Irreversibility of transactions.
Each participant can check the validity of any transaction.
The increasing complexity of calculations, the ability to predict their speed.
According to these criteria, all known digital money is divided. The main types of crypto
currency with which exist are:
1. Bitcoin is the most popular crypto currency, which initiated the development of all such
digital money. The creators of BTC provided open source code for their creation, which allowed
other programmers to create other top-level crypto currencies on this basis and develop them. One
of the names bitcoin, "electronic gold", appeared in considerable due to the high cost of one coin
and the complexity of new mining. Issue bitcoin is limited to 21 million. The virtual coin rate
jumped from $ 200 in September to $ 1,200 by the end of November 2013, and then gradually
declined during 2014 and already in November 2014, bitcoins trade in the range between $ 326 and
$ 430. The turnover is 12 million coins, and the issue is 5 coins per minute. The limitness means
that is no one can infuse more "bitcoins" into the system than was originally programmed. And by
the beginning of 2014, users of the Internet space were "extracted" 60% of all coins.

4. There is also a crypto currency Litecoin (LTC). The system have created in October 2011.
Its creator is a former employee of Google Charlie Lee. At the heart of his currency, he tried to
enclose the correspondence of its price at the exchange with the market prices of silver. Therefore,
lightcoins are called "electronic silver". The current Litecoin course is about $ 3.57. Limiting the
issue of coins - 84 million. By early 2014, 31% of all coins were mined. Transactions in this system
are 4 times faster than Bitcoin. The
Peercoin system (PPC) was created in August 2012, is the third most popular among the
crypto currencies. Its distinctive feature from Litecoin and Bitcoin systems is the absence of any
restrictions on the amount of coin emission, but the presence of inflation at a rate of 1% per year.
The current rate of Peercoin is about 0.74 dollars. In the Peercoin system, revenue is shared not only
between the miners who provide their computing power, but also between the owners of the
currency itself.
Primecoin (XPM) is a modified copy of Bitcoin. The currency was developed and launched
on July 7, 2013 by Sunny King, who also created other well-known cryptocurrencies. Its main
difference is the usefulness of computations. The current rate of Primecoin is about $ 0.14. The
basic idea of creating such a currency is based on the fact that the problem of finding prime
numbers is useful for cryptography, mathematics and other fields of science.
The currency Freicoin (FRC), appeared in 2013. The goal is to solve one of the problems of
modern money, based on the fact that investors often accumulate their currency instead of investing
it. To solve this problem, the creators of Freicoin introduced an annual tax for "simple" - 5%, which
will automatically be levied on all transactions. In their opinion, this tax should stimulate the
currency turnover. The current Freicoin course is about $ 0.002. Limitation of the amount of issued
coins of 100 million.
The total number of crypto currencies according to the latest data is about 308. According to
the resource CoinMarketCap.com, only 11 crypto currencies exceed 0.1% of the volume of bitcoin.
And only 3 currencies exceed 1% of its volume. Bitcoin accounts for about 77% of the Crypto

5. currency market, Litecoin accounts for about 16%, and closes the top three Peercoin with 4.5% of
the market. The remaining coins account with 2.5%.
6.There are several key factors that provide them a market advantage over the
implementation of standard cash payments. The main one is the almost zero cost of transactions and
the ability to quickly conduct financial transactions without any intermediaries and related
commissions for both the sending and receiving parties.
The next main feature of using such a crypto currency payment system is the complete
anonymity of transactions. On the one hand, this is an advantage of the system, money can not be
tracked and blocked. On the other hand, this is also a drawback of such payment systems. When
working with an unscrupulous consumer or client, it is impossible to get your money.
The lack of enforcement authorities for the emission of currency is another advantage of the
system. Crypto currency can not exist more than it is in the initial software algorithms. It is
impossible to steal a crypto currency. Without access to the file generated during the initial
initialization of the electronic wallet and the password, it is impossible to make transactions.
However, this is also a minus of such systems - with the loss of the file to restore the ability to
manage the account is almost impossible.
The main disadvantage of bitcoins is their low prevalence. A variety of surveys conducted
by sociologists around the world show that at least three quarters of the economically active
population have not heard anything about crypto-currencies and, accordingly, do not know how to
work with them. In addition, even among those who are aware of the existence, for example, of
bitcoins, there are only 15-20% of people who declare that they would like to try or have already
tried to conduct any operations with them. The rest admit that they are not going to somehow use
these fully virtual money. This situation creates great difficulties for the development of the
cryptocurrency. Projects focused on their use or application are not so easy to attract financing:
investors are very cautious about such undertakings, including in the absence of a mass market.

6. Bitcoin transactions are out of governmental control. The legal status of Bitcoin is also not
clearly defined, which is weak point of the system. For example, operations with Bitcoin were
officially banned by the People's Bank of China, and in France, the crypto currency was called a
speculative instrument that is subject to high volatility, but there is no single legal framework for
regulating the circulation of Bitcoin. For example FBI and The European Banking Authority are
concerned about money laundering with cryptocurrencies. In 2014 the operators of two exchanges
system for the cryptocurrencies were arrested – they had been charged with money laundering.
7.Crypto currency has already taken its place in the world community. The development of
crypto currency started in 2009, in some countries they are already banned, while other countries
only introduce bitcoins as one of the payment methods. From 2009 it was possible to independently
engage in mining and get bitcoins. Nowadays, mining does not give any special results, but you can
still make money on this asset by buying bitcoins on stock exchanges and following the exchange
rate. To increase the use of bitcoin as a means of payment, it is necessary to reduce its volatility to
the values of standard currencies, which means that it must decrease by at least 4-5 times more so
that consumers begin to use the digital currency widely to pay for various services. Today, the
digital currency is strengthening. As the bitcoin volatility decreases relative to the major world
currencies, there is a tendency to increase its popularity in emerging markets with volatile national
currencies. At the moment, bitcoin is still a niche payment instrument, the development of which,
however, can continue further in one of two directions. In the first case, it has the opportunity to
become an analogue of the main currency, which will be widely used for buying / selling and
accumulating.
Another way of probable formation of bitcoins is to use it as an alternative recognized
currency, world money, through which you can easily make both international settlements and
calculations within each individual country. It should be noted that bitcoin is an asset with a
significant level of risk, and the attitude towards it must be corresponding. According to experts’
forecasts, the legal status of bitcoin in the world in the near future will not change, the regulation of

7. such operations by the government is not expected. Nevertheless, it can be noted that already at the
present time the government formed a suitable environment for the development of the crypto
currency. Despite some problems, bitcoin will be popular, the properties of this currency, as shown
a picture of its development, will be improved over time.