Cryptocurrencies are riding a wave of curiosity and novelty and seeking to make hay in this shining sun, with many altcoins (any Bitcoin alternative) such as Litecoin, Ethereum, Zcash, and others making a splash.
There are over 865 types of cryptocurrencies, with 224 assets across 5329 markets already. Let’s explore the various cryptocurrencies in 2017 and how they differ from each other so that when you are looking at your next buy, you can make an informed decision.
Top Cryptocurrencies in 2017 by Market Cap
When this article was written in late August 2017, the top five cryptocurrencies my market cap were:
- Bitcoin Cash
Dash, NEM, Monero, and IOTA were also frequent members of the top ten cryptocurrencies in 2017.
Each of them will have different uses, fungibility, liquidity risks involved that should be kept in mind while purchasing or accepting them. Here’s a quick overview of each of the top cryptocurrencies in 2017 so far.
Bitcoin – BTC
Bitcoin was the first digital currency and payment system based on mathematical and logical reasoning. As the blockchain is set up, there will only ever be 21 million Bitcoins.
The reputation of Bitcoin faced criticism in its early days, as it has been used for the purchase of illegal goods and services, purchase of “gray market” goods, and as a way for hackers to collect ransom money.
The currency has come a long way to now being respected as a dependable currency. Bitcoin, while still facing challenges, has become an example for how cryptocurrencies in 2017 can develop a supportive community and see mainstream use in the “real world.”
Merchants accepting bitcoins pay fees less than the regular 2 percent of a credit card. It has become reliable as an alternative asset to store value, like the Cypriot Financial Crisis on 2012-13 when people feared their savings to be confiscated.
Bitcoin has come a long way and has more credibility than any other coin. Amazingly, $10,000 worth of bitcoins invested 7 years ago would be worth $500 million today. The increasing price of Bitcoin in 2017 – rising from around $1500 USD to $4500 USD – gives a major confidence boost to investors.
Ethereum – ETH
This is the most famous altcoin. Ethereum is based on a decentralized software platform which helps create Smart Contracts (contracts that can be verified using the rules of cryptography), and Distributed Applications (DApps), which run without any control issues, fraud and interference of any third-party.
The basic infrastructure for running Ethereum is its platform-specific cryptographic token called Ether. Ethereum can be used as a resource in creating applications.
During 2016, Ethereum was split into Ethereum (ETH) and Ethereum Classic (ETC). ETH has a market capitalization of $33 billion, which is second overall in market cap in comparison to Bitcoin’s ($72 billion), as of August 28, 2017.
Bitcoin Cash – BCH
Bitcoin Cash stands with a market cap of $9.8 billion as on August 28, 2017. This “new” currency is a branch from the main Bitcoin and product of the July 2017 “Forkening.”
The offshoot which happened on August 1, 2017, when block 478558 reached its peak of 1 MB of data per block or 3 transactions per second. Since there was no assigned consensus on how to deal with the situation when it would happen, the fork in the blockchain network brought more positives than negatives.
There is an underlying tussle between the cryptography programmers and the Bitcoin miners. The cryptographers support the smaller sized currency to keep it protected from hacks and then the miners who can’t get enough of this to sell, as mining takes enormous time and processing power. It has certainly attracted new capital as people who missed the Bitcoin rally jumped onto this new bandwagon to make money.
Ripple – XRP
Standing with $8.4 billion in market cap, Ripple works like a real-time global settlement network. Established in 2012 by Chris Larsen and Jed McCaleb, the currency is pre-mined and is known more for its digital payment protocol than its cryptocurrency.
Again, this is also an open source and peer-to-peer decentralized platform which allows quick and seamless transfer of payments and even allows payments in Litecoins and Bitcoins. It is called pre-mined because it uses consensus ledger system – which is its method of confirmation, thereby considerably reducing the computing investment required for it.
Litecoin – LTC
Litecoin was created in 2011 by Charlie Lee, an MIT graduate and former Google employee.
It rode the initial waves of altcoins and came to be known second to Bitcoin in order of recognisability and acceptability. It uses “scrypt” as a proof of work and is established out of an open source global payment network which gives it it’s “lite” properties.
Very similar to Bitcoin in many ways, Litecoin has a faster block generation rate and is useful for faster transaction confirmations. Hence, it has become very popular among the number of merchants accepting it. Litecoin is still low on the market capitalisation ranking, with just $3.3 billion as of August 28, 2017.
All in all, altcoins have various different features – while bitcoins will be used for retail transactions as well, Ripple and Ethereum will be useful to organizations to build customisable and secure payment systems. This will build unique spaces for all of them in the altcoin universe. What remains to be seen is the popularity and surge in operations that these currencies will demand with time.