This year, the value of Bitcoin has risen, even surpassing an ounce of gold. There are also new cryptocurrencies in the market, which is even more surprising considering that the value of cryptocoins is more than a hundred billion. On the other hand, the longer-term cryptocurrency outlook is somewhat murky. There is controversy among its core developers about its lack of progress, which makes it less attractive as a long-term investment and payment system.
Still the most popular, Bitcoin is the cryptocurrency that started it all. It is currently the largest market cap at around $41 billion and has been around for the past 8 years. Bitcoin is widely used all over the world and it is not easy to exploit the weakness of the way it works until now. As both a payment system and a store of value, Bitcoin allows users to easily receive and send bitcoins. The concept of blockchain is the foundation upon which Bitcoin is based. To understand what cryptocurrencies are, you need to understand the concept of blockchain.
Simply put, a blockchain is a distributed database that stores each network transaction as a chunk of data called a “block”. Each user has copies of the blockchain, so when Alice sends 1 bitcoin to Mark, everyone on the network knows.
Litecoin, an alternative to Bitcoin, seeks to solve many of the problems holding Bitcoin back. It is not as stable as Ethereum with its value mainly derived from solid user adoption. It should be noted that Charlie Lee, a former Google employee, leads Litecoin. It also practices transparency in what it does with Litecoin and is quite active on Twitter.
Litecoin was second fiddle to Bitcoin for a while, but in early 2017, things started to change. First, Litecoin was accepted by Coinbase along with Ethereum and Bitcoin. Next, Litecoin solved Bitcoin’s problem by adopting Segregated Witness technology. This allowed him to reduce transaction fees and do more. But the decisive factor was that Charlie Lee decided to focus all his attention on Litecoin and even left Coinbase, where he was the Director of Engineering, only for Litecoin. For this reason, the price of Litecoin has risen in the last few months, the strongest factor of which is that it can be a real alternative to Bitcoin.
Vitalik Buterin, a superstar programmer, envisioned Ethereum that could do everything Bitcoin could. However, its purpose is primarily to be a platform for building decentralized applications. Blockchains are where the differences between the two lie. Basically, Bitcoin’s blockchain records a type of contract that states whether funds are transferred from one digital address to another. However, there is significant expansion with Ethereum because it has a more advanced scripting language and has a more complex, wider range of applications.
As developers began to see its better qualities, projects began to sprout on top of Ethereum. Through token crowd sales, some have even raised millions of dollars, a trend that still continues today. The fact that you can build cool things on the Ethereum platform makes it almost like the internet itself. This caused the price to skyrocket, so if you bought a hundred dollars worth of Ethereum earlier this year, it wouldn’t be worth nearly $3,000.
Monero aims to solve the issue of anonymous transactions. Even if this currency is perceived as a method for money laundering, Monero aims to change that. Basically, the difference between Monero and Bitcoin is that Bitcoin has a transparent blockchain where every transaction is open and recorded. With Bitcoin, anyone can see how and where money is being transferred. However, Bitcoin has somewhat imperfect anonymity. In contrast, Monero has an opaque rather than transparent transaction method. No one is sold on this method, but as some people love privacy for any purpose, Monero is here to stay.
Unlike Monero, Zcash also aims to solve the problems that Bitcoin has. The difference is that, rather than being completely transparent, Monero is only partially public, blockchain-style. Zcash also aims to solve the problem of anonymous transactions. After all, not everyone likes to show off how much they spend on Star Wars memorabilia. So the bottom line is that there is indeed an audience and demand for this type of cryptocoin, although it’s hard to say which privacy-focused cryptocurrency will ultimately come out on top of the pile.
Bancor, also known as a “smart token”, is a next-generation cryptocurrency standard that can store multiple tokens. Basically, Bancor seeks to facilitate the trading, management and creation of tokens by increasing the level of liquidity and enabling automated market pricing. Bancor currently has a product on the front end that includes creating a wallet and smart token. The community also has features such as statistics, profiles and discussions. In short, the Bancor protocol enables the discovery of an internal price and liquidity mechanism for smart contract tokens through an innovative reserve mechanism. Through a smart contract, you can instantly liquidate or buy any token in Bancor’s reserve. With Bancor you can easily generate new cryptocoins. Now who wouldn’t want that?
Another competitor to Ethereum, EOS, promises to solve Ethereum’s scaling problem with a more robust set of tools for building and running applications on the platform.
Tezos, an alternative to Ethereum, can be developed consensually without much effort. This new blockchain is decentralized in the sense that it governs itself by creating a digital real community. It facilitates a mathematical technique called formal verification and has the security-enhancing features of the most financially sensitive, sensitive smart contract. Definitely a great investment in the coming months.
It is quite difficult to predict which Bitcoin will be the next superstar on the list. However, when it comes to cryptocurrencies, user adoption has always been one of the key success factors. Both Ethereum and Bitcoin have it, and while each cryptocurrency on the list has plenty of support from early adopters, some have yet to prove their staying power. Nevertheless, these are the ones to invest in and watch out for in the coming months.