There’s very little doubt left anymore that people haven’t heard a little bit about cryptocurrency. The sector has seen a massive upswing in price this year with bitcoin prices leading the way to a whopping $19k at one point in certain markets.
There are now over 1,300 other cryptocurrencies out there and even though bitcoin is still a major force to be reckoned with, there are other crytptocurrencies that have begun to grow. Here’s a quick list of a few to get you started with some of the biggest digital currencies in the market:
Market cap: $275.1 billion
Bitcoin was invented in 2009 and it is the largest cryptocurrency by value, right now. Satoshi Nakamoto, bitcoin’s ellusive founder, released a whitepaper that outlined the aim of the bitcoin project. The original document explained how bitcoin is a “peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
It has been referred to as “digital gold” as many have said it could be a “long-term store of value”. Some retailers in Japan have even begun to take bitcoin as a form of payment for naything from real estate to groceries.
Market cap: $71.1 billion
Ethereum named after a blockchain company that made the digital token, ether. Now, Ethereum and ether are used interchangeably to identify the cryptocurrency. Ether is backed by a blockchain that is similar to bitcoin, but the technology is a little bit different. It’s actually targeting a specific use for smart contracts.
An example would be a trade finance deal. This is dependent on each party in the deal having a paper or digital duplicate of the contract and needs to update it individually. It’s a drawn out process and can involve higher levels of error.
Smart contracts are written in code into a blockchain. Once the terms of the contract are met by each party, a deal will be executed. The interesting part is that there are major organizations are experimenting with Ethereum’s blockchain including Microsoft and JPMorgan who are developing uses for Ethereum’s blockchain.
Market cap: $16.5 billion
Litecoin is most likely bitcoin’s closest opponent as far as how it’s being used. The founder is Charlie Lee who has explained that cryptocurrency can be used for payments because of the speed compared to bitcoin. Transactions using Litecoin take just over two minutes to complete, compared to an average of roughly 300 minutes for bitcoin.
Like Bitcoin, there is a limited supply, which is said to be 84 million litecoins, which is compared to 21 million bitcoin. Currently, 54,293,533 litecoin and 16,740,175 bitcoin are in circulation.
Market cap: $33 billion
Bitcoin cash was created earlier this year after bitcoin split or conducted a “hard fork.”
Basically, for bitcoin owners at that time, they received free bitcoin cash tokes. Unfortunately the alternative currency hasn’t enjoyed the rally that Bitcoin has. Many developers were concerned about the higher times for transactions to be conducted. Because of this, may have said that a solution would enhance the size of each transaction and result in higher speeds of completion. Not all in the community approved the proposal, resulting in the split. The group behind bitcoin cash explained that transaction times are faster than the original bitcoin.
Market cap: $21.8 billion
Ripple bills itself as a “cross-border payments solution” for large financial institutions based on blockchain technology.
At the moment, an international payment may take a few days to make with a sizeable cost. For banks with higher transaction volumes this may be a big issue, think of something like what Facebook might pay out to app makers, for example.
These can be expensive and not so profitable for the banks for the main reason being that it takes a lot of work to move the money and the profit won’t be as high as for a larger transaction. Ripple is trying to address this issue with its technology. The start-up has been conducting trials with a number of financial institutions, including American Express and Santander. XRP performs as a bridge between fiat currencies during a transaction. Ripple said transactions in XRP can be settled in four seconds, faster than any major cryptocurrency right now.