This year, the value of bitcoin has jumped even by an ounce of gold. There are also new cryptocurrencies on the market, which is even more surprising, bringing the value of cryptocurrencies to more than one hundred billion. On the other hand, the long-term outlook for cryptocurrency is somewhat blurred. There are quarrels about the lack of progress among the main developers, 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 capitalization of about $ 41 billion and has existed for the past eight years. Bitcoin is widely used around the world and it is not easy to take advantage of the weakness of the method it works with. Both as a payment system and as a stored value, bitcoin enables users to easily receive and send bitcoins. The blockchain concept is the foundation on which bitcoin is based. It is necessary to understand the concept of blockchain in order to understand what cryptocurrencies are.
Simply put, a blockchain is a database distribution that stores each network transaction as a block of data called a “block”. Every user has blockchain copies, so when Alice sends 1 bitcoin to Mark, everyone on the web knows.
An alternative to bitcoin, Litecoin is trying to solve many of the problems that hold bitcoin. It is not as sustainable as Ethereum, and its value is derived mostly from the acceptance of solid users. It is worth noting that Charlie Lee, a former Google employee, runs Litecoin. He also practices transparency with what he does with Litecoin and is quite active on Twitter.
Litecoin was Bitcoin’s second fiddle in a long time, but things started to change in early 2017. First, Litecoin was adopted by Coinbase along with Ethereum and Bitcoin. Litecoin then fixed the bitcoin problem by adopting Segregated Witness technology. This gave him the capacity to reduce transaction fees and do more. The deciding factor, however, was when Charlie Lee decided to put his only focus on Litecoin and even left Coinbase, where he was engineering director, for Litecoin alone. As a result, the price of Litecoin has risen over the past few months, with the strongest factor being the fact that it could be a real alternative to Bitcoin.
Vitalik Buterin, a superstar programmer, invented Ethereum, which can do everything Bitcoin can do. However, its main purpose is to be a platform for building decentralized applications. Blockchains are where the differences between the two lie. In principle, the bitcoin blockchain records a type of contract that specifies whether funds have been moved from one digital address to another. However, there is a significant extension with Ethereum, as it has a more advanced language script and has a more complex and wider range of applications.
Projects began to emerge on Ethereum when developers began to notice its better qualities. Through the crowd selling symbols, some have even raised millions of dollars, and this is still a trend even today. The fact that you can create wonderful things on the Ethereum platform makes it almost like the Internet itself. This has caused the price to rise sharply, so if you buy Ethereum for $ 100 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 is perceived as a method of money laundering, Monero seeks to change that. In general, the difference between Monero and Bitcoin is that Bitcoin has a transparent blockchain, with each transaction being public and recorded. With bitcoin, everyone can see how and where the money was transferred. However, there is some imperfect anonymity about bitcoin. In contrast, Monero has a non-transparent rather than transparent transaction method. No one is completely sold with this method, 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 instead of being completely transparent, Monero is only partially public in its blockchain style. Zcash also aims to solve the problem of anonymous transactions. After all, not everyone likes to show how much money they actually spent on Star Wars souvenirs. Therefore, the conclusion is that this type of cryptocurrency does have an audience and demand, although it is difficult to determine which cryptocurrency that focuses on privacy will eventually come out on top.
Also known as the “smart token”, Bancor is the next generation standard for cryptocurrencies that can hold more than one token in reserve. In principle, Bancor seeks to facilitate the trading, management and creation of tokens by increasing their level of liquidity and allowing them to have a market price that is automated. Bancor currently has a front-end product that includes a wallet and smart token creation. The community also has features such as statistics, profiles and discussions. In short, the Bancor protocol allows the discovery of a built-in price as well as a liquidity mechanism for smart contract tokens through an innovative reserve mechanism. With a smart contract, you can immediately liquidate or purchase one of the tokens in the Bancor reserve. With Bancor you can create new cryptocurrencies with ease. Now who wouldn’t want that?
Another competitor to Ethereum, EOS promises to solve the problem of scaling Ethereum by providing a set of tools that are more stable to run and build applications on the platform.
An alternative to Ethereum, Tezos can be upgraded by mutual consent without too much effort. This new blockchain is decentralized in the sense that it is self-governing by creating a real digital community. It facilitates a mathematical technique called formal verification and has features to increase the security 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, consumer acceptance has always been a key success factor when it comes to cryptocurrencies. Both Ethereum and Bitcoin have this, and even if there is strong support from the early adopters of each cryptocurrency on the list, some have not yet proven their resilience. Nevertheless, these are the ones you need to invest in and be careful about in the coming months.