This year, the value of Bitcoin has soared even more than one ounce of gold. New cryptocurrencies are also emerging in the market, which is even more surprising since the value of cryptocurrencies reaches more than a hundred billion. On the other hand, the longer-term outlook for cryptocurrency is somewhat blurred. There is controversy among its core developers about the lack of progress, which makes it less attractive as a long-term investment and as a payment system.
Still the most popular Bitcoin is the cryptocurrency that started it all. It currently has the largest market cap of around $41 billion and has been around for the past 8 years. Bitcoin is widely used all over the world and there are no weaknesses in its method that can be easily exploited. Both a payment system and a store of value, Bitcoin allows users to easily receive and send Bitcoins. The blockchain concept is the foundation upon which Bitcoin is based. It is necessary to understand the concept of blockchain in order to understand what cryptocurrencies are.
Simply put, blockchain is a distributed database that stores each network transaction as a block of data called a “block”. Every user has copies of the blockchain, so when Alice sends 1 Bitcoin to Mark, every person on the network knows about it.
Litecoin, one of the alternatives to Bitcoin, attempts to solve many of the problems holding Bitcoin back. It is not as stable as Ethereum, its value is mainly driven by the adoption of reliable users. It should be noted that Charlie Lee, a former Google employee, is the head of Litecoin. He also practices transparency in what he does with Litecoin and is quite active on Twitter.
Litecoin has been second fiddle to Bitcoin for quite some time, but things started to change in early 2017. First, Litecoin was accepted by Coinbase along with Ethereum and Bitcoin. Litecoin then fixed Bitcoin’s problem by adopting Segregated Witness technology. This gave him the ability to lower transaction fees and make more. However, the deciding factor was that Charlie Lee decided to focus exclusively on Litecoin and even left Coinbase, where he was the director of engineering, just for Litecoin. Because of this, the price of Litecoin has increased over the past couple of months, with the strongest factor being that it can become a true alternative to Bitcoin.
Vitalik Buterin, a superstar programmer, came up with Ethereum, which can do everything Bitcoin can do. However, its purpose is primarily to be a platform for creating decentralized applications. In blockchains lies the difference between the two. Essentially, the Bitcoin blockchain records a type of contract that indicates whether funds have been moved from one digital address to another. However, Ethereum has significant expansion as it has a more advanced language script and has a more complex and wide range of applications.
Projects began to appear based on Ethereum when developers began to notice its best qualities. Through token crowdsales, some have even raised millions of dollars, a trend that continues even to this day. The fact that you can create great things on the Ethereum platform makes it almost like the Internet itself. This has caused the price to skyrocket, so that if you bought a hundred dollars worth of Ethereum earlier this year, it won’t be valued at nearly $3,000.
Monero aims to solve the problem of anonymous transactions. Even if this currency was perceived as a method of money laundering, Monero aims to change that. Essentially, the difference between Monero and Bitcoin is that Bitcoin has a transparent blockchain where every transaction remains public and recorded. With Bitcoin, anyone can see how and where money has been transferred. However, Bitcoin’s somewhat imperfect anonymity exists. In contrast, Monero has an opaque rather than a transparent transaction method. No one is committed to these methods, but since 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 Monero is not fully transparent, but only partially public in its blockchain style. Zcash also aims to solve the problem of anonymous transactions. After all, not everyone likes to show off how much money they’ve spent on Star Wars memorabilia. So it begs to be concluded that this type of cryptocurrency does have an audience and demand, although it’s hard to say which privacy-focused cryptocurrency will ultimately come out on top.
Also known as a “smart token,” Bancor is a next-generation cryptocurrency standard that can hold more than one token in reserve. Basically, Bancor tries to facilitate the trading, management and creation of tokens, increasing their level of liquidity and allowing them to have an automated market price. Bancor currently has a front-end product that includes a wallet and smart token creation. The community also has features like statistics, profiles, and discussions. In a nutshell, the Bancor protocol provides an embedded price discovery as well as a liquidity mechanism for smart contract tokens through an innovative reserve mechanism. Through a smart contract, you can instantly liquidate or purchase any of the tokens in Bancor’s reserve. With Bancor, you can create new cryptocurrencies with ease. Who wouldn’t want that?
Another Ethereum competitor, EOS, promises to solve Ethereum’s scaling problem by providing a more robust set of tools to run and build applications on the platform.
An alternative to Ethereum, Tezos can be upgraded by consent without much effort. This new blockchain is decentralized in the sense that it is self-governing through the creation of a true digital commonwealth. It facilitates a mathematical technique called formal verification and has security-enhancing features of the most financially weighted, sensitive smart contract. Definitely a great investment in the coming months.
It is incredibly difficult to predict which Bitcoin on the list will become the next superstar. However, user acceptance has always been one of the key success factors when it came to cryptocurrencies. Both Ethereum and Bitcoin have this, and even though there is a lot of early adopter support for each cryptocurrency on the list, some have yet to prove their strength. However, these are the ones to invest in and keep an eye on in the coming months.