Bitcoin isn’t the only cryptocurrency in town. It may be the biggest and most widely used, but there are several others also surging in popularity and value, claiming to offer technical improvements that make them better suited to mainstream use. Here’s an over view of some market trading statistics taken yesterday:
Still top dog, but there are a few puppies nipping at the feet of bitcoin.
Dogecoin:
On the topic of dogs, enter Dogecoin. Those up to date in memes and internet irony will remember and love this little critter. Users drop Dogecoins in each other’s tip jars in exchange for helpful information. From the coin’s website, “Think of it as a more meaningful ‘like’ or ‘upvote,’ with real value that can be used all across the internet. Okay so it’s not really a threatening competitor, but it is insanely popular and seems pretty certain to remain far from the likes of Silk Road. The currency isn’t currently trading at that high of a value but the premise behind it is rather opportunistic. Perhaps bitcoin could introduce themed coins or limited edition coins to raise value?
Litecoin:
And now onto the big boys.
Litecoin’s stated goal is to improve upon bitcoin in several ways. It is currently the second largest cryptocurrency by market share and aims to potentially overtake bitcoin by having four times the currency unit cap of bitcoin.
Without getting too technical, Litecoin’s main advantage over bitcoin is its shorter block rates, meaning it has quicker transaction times. Litecoin uses a mathematical puzzle that cannot be solved using custom mining chips like those appearing for bitcoin, which are expected to dramatically shrink the number of people able to mine the currency (see “Custom Chips Could Be the Shovels in a Bitcoin Gold Rush”). It also offers a “hand on deck” to those who either missed the bitcoin boat or miners who were squeezed out by more powerful entrants to the bitcoin game.
With bitcoin trading at approximately $250, Litecoin’s act as a hedge for investor strategists, trading at only a few dollars. Of course one could purchase part of a bitcoin, but there is a psychological satisfaction that goes with owning one’s own coin(s) .
It’s a cheaper, less popular and less functional version of its bigger brother. Furthermore, it is yet to be accepted as payment by any vendor. However this could all change given the advances of bitcoin and the regulation of cryptocurrencies in the UK on the horizon, but that’s for another day.
Ripple:
Ripple is one of the most interesting and promising altcoins, if only because it’s not really an altcoin, then again it is, but it’s also much, much more. First off Ripple has no blockchain, no mining, and no hard limit on number of transactions per second. Because of this, its transactions can be completely confirmed within seconds rather than hours. Since there is no mining, there is no 51% attack (aforementioned in How secure are my Bits?), which in bitcoin allows someone who invests enough money to either double spend or shut down the entire network. Due to this fact it is also a more energy-efficient cryptocurrency and doesn’t require computations to approve transactions.
Here’s where things get a bit confusing. Ripple is a whole bunch of cool and groovy parts that make up a crypto-network. It is composed of three main parts; a payment network, an exchange and a currency. The network is basically a web of approved friends, with who you can exchange any currency you wish, be it bitcoin or euros. If you’d like to scratch your brain for an hour here’s a video as to how it works in practice.
So in theory Ripple is more of an ally to bitcoin, than an enemy. However, it is an ally to cryptocurrencies as a whole, allowing to trade between currencies with ease. Indeed if it gains traction it will promote new entrants to the cryptocurrency market with a preexisting platform on which to trade upon. This could be bitcoins biggest threat, but at the moment they enjoy a symbiotic relationship.
Bits About BitCoin 