You’ve probably heard of Bitcoin – it’s the first decentralised cryptocurrency, after all. While Bitcoin is arguably the most well-known cryptocurrency, it certainly isn’t the only cryptocurrency that matters. Besides Bitcoin, there are lots of other coins in the market which have unique functions and features.
If you want to learn more about cryptocurrencies, it’s important to know what other coins are out there besides Bitcoin. Here are 10 other important cryptocurrencies you need to know:
Launched in 2011, Litecoin is often known as the “silver to bitcoin’s gold”. Litecoin is quite similar to Bitcoin in many ways – it’s not controlled by a central authority and uses “scrypt” as a proof of work. What makes it different from Bitcoin, though, is that it processes transactions about four times faster. Additionally, unlike Bitcoin, you don’t need sophisticated computers to mine Litecoin. Anyone with a consumer grade CPU can be part of Litecoin’s mining community.
If you’ve been reading up on cryptocurrency, you might have come across Ethereum, one of the most popular altcoins. Ethereum has been a strong contender against Bitcoin for a while and the reason lies in its built in features. On top of being a decentralised system, Ethereum also allows programmers to write computer programs, known as Smart Contracts, which run on its blockchain.
These Smart Contracts have multiple functions. Unlike Bitcoin’s more restrictive system, Smart Contracts on Ethereum can be programmed to meet users’ specific needs. It can manage agreements, function as a “multi-signature” account (where funds are sent only after a percentage of people agree), and store personal or corporate information. According to Ethereum, it can enable users to “codify, decentralize, secure and trade just about anything,” which soon ushered in the age of Initial Coin Offering (ICO).
Ethereum Classic was formed when there was a split in the Ethereum community. How did this split come about? It happened because a Smart Contract in the Ethereum System, known as DAO had a loophole. In 2016, this loophole was being exploited and one-third of DAO’s funds were stolen (US$50 million). Due to disagreements on how this situation should be handled, the community had split up. Those who insisted on sticking to the old rules created Ethereum Classic, while those who wanted to implement new rules continued to call their ecosystem Ethereum.
You can think of Ripple as the bank’s cryptocurrency. Its token, (XRP), “enables banks to settle cross-border payments in real time, with end-to-end transparency, and at lower costs.” Unlike Bitcoin, Ripple doesn’t require mining which reduces the exhaustion of computing power. Ripple has provided a low-cost option to settle cross-border payments. Additionally, its unique model also allows it to handle transactions much faster than Bitcoin and Ethereum.
While Ripple has an edge over many of its cryptocurrency predecessors, critics point out that Ripple is a privately owned organisation. This means that it hasn’t achieved enough decentralisation, a core value of many cryptocurrencies.
Known as a “privacy coin”, Monero allows transactions to be secure, private, and untraceable through its “ring signature” system. However, due to its exceptionally secure and private system, Monero has also become popular among cybercriminals and others who are involved in illicit activities.
Originating from China, NEO is sometimes referred to as “Chinese Ethereum”. Just like Ethereum, it uses smart contracts and gained the attention of many businesses. According to its founders, NEO has the capability to allow for 10 000 transactions per second, a huge feat compared to Ethereum’s 15 per second.
A downside to this cryptocurrency, however, is that it’s highly centralised. Although its founder hopes to make NEO more decentralised, we can’t be certain of it.
Bitcoin Cash (BCH)
Ethereum isn’t the only one that was split with a “hard fork” – Bitcoin, too, experienced a split. As Bitcoin was the first cryptocurrency, there are features about its system which pose limitations. One such limitation was scalability – or the number of transactions it can handle per second. Due to differences within the Bitcoin community, a “hard fork” occured and Bitcoin Cash was formed.
The Bitcoin Cash community tweaked Bitcoin’s software to allow it to handle transactions in larger volumes. Although this seemed like a good idea, many within the Bitcoin community did not support this move as they felt that Bitcoin Cash was too centralised – the new system only allowed a small group of miners to create coins.
Similar to Monero, Dash is known for untraceable transactions and privacy. The anonymity that users enjoy, coupled with higher speeds for processing transactions made it popular among many.
“If bitcoin is like http for money, zcash is https,” was how founders of Zcash saw themselves. Like Dash and Monero, Zcash offers more privacy for users. However, instead of complete privacy, transactions are shielded. This means that only details about the users involved and amount translated are hidden. These “shielded” transactions allow encryption through advanced cryptographic technique called a zk-SNARK developed by its team.
Similar to Dash and Monero, PIVX is a privacy coin. According to PIVX, they “believe that you have the right to exchange privately and securely, without interference from corporatocracy pressures, governmental influences, prying eyes, and nefarious individuals and movements.”
However, while users may prefer more privacy, PIVX’s untraceable transactions makes its currency susceptible to illicit activities.
And here you have it – the 10 altcoins you need to keep a lookout for. Cryptocurrency is relatively new, which makes it an interesting space to watch out for new developments. Many altcoins are created as a response to Bitcoin’s limitations. Learning about how these altcoins work not only gives you new insight, it also helps you make more informed choices if you’re thinking of dabbling in cryptocurrency. Who knows? One of these altcoins might surpass Bitcoin’s popularity some day.
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