This year, the value of Bitcoin has skyrocketed, surpassing even an ounce of gold. There are also new cryptocurrencies in the market, which is even more surprising and brings the value of cryptocurrencies to over one hundred billion. On the other hand, the longer-term outlook for cryptocurrency is somewhat hazy. There are quarrels of lack of progress among its main developers, which makes it less attractive as a long-term investment and as a payment system.
Bitcoin
Still the most popular, Bitcoin is the cryptocurrency that started it all. It is currently the largest market capitalization at around $41 billion and has been around for 8 years. All over the world Bitcoin has been widely used and so far it is not easy to exploit the weakness of the method it uses. Both as a payment system and as a stored value, Bitcoin allows users to easily receive and send bitcoins. The concept of the blockchain is the foundation on which Bitcoin is based. It is necessary to understand the concept of blockchain to get an idea of what cryptocurrencies are.
To put it simply, blockchain is a database distribution that stores every network transaction as a block of data called a block. Each user has copies of the blockchain so when Alice sends 1 bitcoin to Mark, everyone on the network knows it.
Litecoin
An alternative to Bitcoin, Litecoin attempts to address many of the issues holding Bitcoin back. It is not as resilient as Ethereum, with its value mostly coming from strong user adoption. It is worth noting that ex-Googler Charlie Lee runs Litecoin. He also practices transparency with what he does with Litecoin and is very active on Twitter.
Litecoin was second fiddle to Bitcoin for a while, but things started to change in early 2017. First, Litecoin was adopted by Coinbase along with Ethereum and Bitcoin. Then Litecoin solved the Bitcoin problem by adopting Segregated Witness technology. This gave him the ability to reduce transaction fees and achieve more. The deciding factor, however, was when Charlie Lee decided to focus solely on Litecoin and even left Coinbase, where he was the engineering manager, just for Litecoin. For this reason, the price of Litecoin has risen over the past two months, its strongest factor being the fact that it could be a real alternative to Bitcoin.
ethereal
Vitalik Buterin, superstar programmer, envisioned Ethereum, which can do everything Bitcoin is capable of. However, its main purpose is to be a platform for building decentralized applications. Blockchains are where the differences between the two lie. Basically, the Bitcoin blockchain records a type of contract, one that indicates whether funds have been moved from one digital address to another address. However, there is significant expansion with Ethereum as it has a more advanced scripting language and has a more complex and broader scope of applications.
Projects started to sprout on top of Ethereum when developers started noticing its best qualities. Through token crowd sales, some have even raised millions of dollars and it’s still an ongoing trend even to this day. The fact that you can create wonderful things on the Ethereum platform makes it almost like the internet itself. This caused the price to skyrocket, so if you bought Ethereum for $100 at the start of this year, it wouldn’t be valued at nearly $3,000.
Monero
Monero aims to solve the problem of anonymous transactions. Even though this currency was seen as a method of money laundering, Monero aims to change that. Basically, the difference between Monero and Bitcoin is that Bitcoin has a transparent blockchain with every transaction public and recorded. With Bitcoin, anyone can see how and where money has moved. There is, however, a somewhat imperfect anonymity on Bitcoin. In contrast, Monero has an opaque rather than transparent transaction method. No one is quite sold on this method, but since some people like privacy for any purpose, Monero is here to stay.
zcash
Just like Monero, Zcash also aims to solve the problems faced by Bitcoin. The difference is that rather than 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 off how much money they actually spent on Star Wars memorabilia. Thus, the conclusion is that this type of cryptocoin does have an audience and a demand, although it is difficult to determine which cryptocurrency that focuses on privacy will end up making it to the top of the list.
bank
Also known as the “smart token”, Bancor is the next-generation cryptocurrency standard that can hold more than one token in reserve. Basically, Bancor tries to make it easier to trade, manage and create tokens by increasing their level of liquidity and allowing them to have an automated market price. Currently, Bancor offers a front-end product that includes a wallet and the creation of a smart token. There are also features in the community such as stats, profiles, and discussions. In a nutshell, Bancor’s protocol enables the discovery of an integrated price as well as a liquidity mechanism for smart contract tokens through an innovative reserve mechanism. Through a smart contract, you can instantly liquidate or purchase any of Bancor’s reserve tokens. With Bancor you can easily create new cryptocurrencies. Now who wouldn’t want that?
eos
Another competitor to Ethereum, EOS promises to solve Ethereum’s scaling problem by providing a more robust set of tools to run and build applications on the platform.
Tezos
An alternative to Ethereum, Tezos can be upgraded by consensus without much effort. This new blockchain is decentralized in the sense that it governs itself through the establishment of a true digital commonwealth. It facilitates the mathematical technique called formal verification and has security hardening features of the most financially weighted and sensitive smart contract. Certainly an excellent investment in the months to come.
verdict
It is incredibly difficult to predict which Bitcoin from the list will become the next superstar. However, user adoption has always been a key success factor when it comes to cryptocurrencies. Both Ethereum and Bitcoin have this and while there is a lot of support from early adopters for each cryptocurrency on the list, some have yet to provide their staying power. Nonetheless, these are the ones to invest in and watch for in the coming months.