Bitcoin is the cryptocurrency that everyone knows but the blockchain technology has made it possible for a host of alternatives to emerge. These “altcoins” arrived via a funding mechanism called ICO (initial coin offering) – which is somewhere between venture capital and a stock offering. Understanding which altcoins will perform and which are reputable requires some research. Here are five such alternatives to Bitcoin.
After Bitcoin, Ethereum is the second largest market cap. It is used as a currency because it is stable and transactions are fast. Ethereum was actually built as a platform which can be used to build other applications. However, its smart contracts make it most appealing – as it allows two parties to operate without such risks as fraud or downtime.
This is a global payment system, similar to Bitcoin. It offers fast transfer to anywhere in the world on a low maintenance system. Ripple aims to disrupt the market that is dominated by complicated, slow and expensive money transfer through the banking system. The encryption and security makes it impossible to change a transaction but allows a permanent record should there every be a dispute.
Nexus has a lightweight database that speeds up processing. There is a one-time use key to ensure security. What makes Nexus particularly interesting is its founder Colin Cantrell – whose father has links with SpaceX. He has the aspiration to launch satellites that will connect with blockchain and provide the tech for a decentralised internet. This would take the vision of a currency out of the control of government and control one step further along the path.
Lisk is one of those alternatives to bitcoin that surged recently. It is an attractive proposition because of its connections with Microsoft – the partnership brought the blockchain application Azure Cloud. You can create your own custom blockchains, called sidechains.
ARK also surged in August and then also recently pulled back. It is an attractive altcoin as it allows new chains to be connected using “SmartBridges.” Tokens and data can easily be transferred backwards and forwards using this technology.
The secret behind Monero is its algorithm called “Cryptonote”. This algorithm allows for transactions to be private and untraceable. A particular user cannot be linked to a transaction – which few other blockchain technology providers can truly promise. As with other altcoins, Monero made a significant surge in August, multiplying by four in a few weeks.
Litecoin has the same aspiration to become a currency of the future – which is what drives Bitcoin. It hopes to steal Bitcoins thunder by being a faster, leaner version of its big brother. The idea being that in the future you will be walking into the coffee shop and paying with your Litecoin. Its tech is pretty solid and makes fraud or disruption to the transaction almost impossible.
So, which one?
Well, who knows which will surge and which will drop back. This list is only a small sample of the altcoins emerging and you can imagine with the recent growth – or bubble depending on your opinion – there will be dozens more soon. It is best to track the news carefully and take your chances using the most up-to-date information you can.