The world of cryptocurrencies is still a great mystery to many. Some are even completely unaware of their existence, while others have heard of them, but have never been really interested in them. There are also those who simply find the whole idea too overwhelming and don’t even want to try to understand how it all works.
Still, the trend seems to suggest that cryptocurrencies are here to stay, which means it would be wise to know what cryptocurrencies are and what options are available.
Although most people immediately think of Bitcoin when cryptocurrencies are mentioned, it’s worth noting that there are other efficient alternatives as well. All those currencies inspired by Bitcoin are also known as altcoins and they aim at offering solutions that are more efficient than those offered by Bitcoin.
Some of these cryptocurrencies are easier to mine than Bitcoin, but they also come with a greater risk due to lower liquidity, acceptance and value retention. However, if you’re looking for some popular alternatives, take a look at the six that stand out due to some of their features.
Litecoin is one of the oldest cryptocurrencies, based on an open-source global payment network. Since the network can’t be controlled by any central authority, it resembles Bitcoin, but it has a faster block generation rate, which translates into a quicker transaction confirmation.
It is becoming increasingly popular nowadays, with more and more traders ready to accept it. This also means that Litecoin’s price has soared recently, as the consequence of the trust people have in it.
It could be argued that there are more innovative options out there, but the fact that Litecoin is led by Charlie Lee, who is a great believer in transparency and who keeps all his Twitter followers regularly updated about what he’s doing with this cryptocurrency, is a great advantage.
This relatively new cryptocurrency, launched in 2015, is a decentralized software platform that allows Smart Contracts and Distributed Applications to be built and run without any fraud, interference or control from a third party and its primary purpose is to be a platform upon which decentralized applications can be built.
Unlike Bitcoin, Ethereum uses a more advanced scripting language and its smart contracts can be complex applications, which can be used in a very wide range of situations. It is said that Ethereum can be used to “codify, decentralize, secure and trade just about anything”, and its value depends on the value of the apps built on top of it, which is one of the greatest potential threats. It’s also quite volatile and apparently prone to plunges in price following hackers’ attacks.
Another new addition to the world of digital currencies, Zcash boasts privacy and selective transparency of transactions. In other words, Zcashallegedly provides additional security or privacy where all transactions are recorded and published on a blockchain, but the information about the sender, recipient and amount remain private. Users can also opt for a “shielded” transaction, where content is encrypted using an advanced cryptographic technique.
Zcash is also the first cryptocurrency that provides full protection of privacy on transactions, where they are shielded on both the amount and the receiver’s end. It comes as no surprise that even the most famous whistleblower Edward Snowden has hailed Zcash as the “most interesting alternative” to Bitcoin.
Dash, or as it was originally known Darkcoin, provides more anonymity than Bitcoin, since it operates on a decentralized mastercode network, thus making transactions almost impossible to trace. Since 2014, when it was introduced, Dash has been gaining in popularity, partly because it can be mined using a CPU or GPU.
After rebranding in 2015, when Darkcoin became Dash, i.e. digital cash, all the technological features remained unchanged and the number of people who decided to trade Dash has been increasing ever since. Finally, the transactions are more secure, due to the support provided by 1,000 Gigahash of X11ASIC computing power and 4,100+ servers hosted around the world.
Ripple is another alternative to Bitcoin, which offers instant, secure and inexpensive international payments. An interesting thing about Ripple is its consensus ledger, i.e. its method of confirmation, which doesn’t require mining, thus making it quite different from most other cryptocurrencies, including Bitcoin. This feature means that the required computing power is much lower and network latency is minimized.
Ripple’s rationale is that ‘distributing value is a powerful way to incentivize certain behaviors’, which is why current plans for distribution of XRP are related to “business development deals, incentives to liquidity providers who offer tighter spreads for payments, and selling XRP to institutional buyers interested in investing in XRP.”
Monero is another currency that is secure, private and untraceable. It generated great interest among the cryptography community and enthusiast after its introduction in 2014, primarily because the development of this cryptocurrency is totally donation-based and community-driven.
Monero’s focus since its launch has always been on decentralization and scalability.
It provides complete privacy though a special technique called “ring signatures“. This technique involves the appearance of a group of cryptographic signatures, including at least one real participant. However, the trick is that the real one can’t be isolated, since all signatures appear valid. Being private by default, Monero is now one of the most interesting options for those determined to remain anonymous while making transactions.
As it stands, Bitcoin seems like a strong favorite to remain the first choice when it comes to cryptocurrencies, in terms of market capitalization, user base and popularity. However, it too has its flaws,which might change the situation completely down the road. After all, cryptocurrencies were introduced to tackle the problems that real currencies couldn’t, so it makes perfect sense that people will continue to look for better, more flexible and more appropriate currencies to complete their transactions.
It is already clear that some alternatives are quickly gaining popularity, while others have become hot favorites among certain groups of users. Whatever the case, it seems certain that the world of cryptocurrencies is going to expend and we can only guess to which proportions. Logically, as the need for more secure and faster transactions rises, so will the demands, which means that only those currencies that are ready to meet such demands will emerge as the most popular and, perhaps, one day overthrow Bitcoin from the throne.