If you’ve been keeping up with the digital currency revolution, you probably know quite a lot about bitcoin. One of the most important cryptocurrencies, bitcoin was invented back in 2009 by the mysterious Satoshi Nakamoto as a digital alternative to traditional physical currencies. Nakamoto wanted to create a trust-free currency. One where individuals were the only ones involved in transactions and no third parties could interfere. His mission was successful, and the world was forever changed.
It’s not just bitcoin that’s spearheading the cryptocurrency movement, though. There are several other types of digital currency that all offer different things and have different strengths. If you’re looking to trade in digital currency and you’re not particularly enthused by bitcoin (although you should be), you’ve got options. Here are the 6 most important cryptocurrencies on the market. These aren’t the only ones; they’re simply the ones we’ve deemed most significant.
Bitcoin – and cryptocurrency more generally – may have plenty of precedents, but this was the first time the idea had been tried so successfully and with such a detailed plan. This is the most successful of the cryptocurrencies to date. Probably the one you think of when you’re talking about cryptocurrency. The bitcoin infrastructure is pretty well-developed. You can buy and sell bitcoin, carry out transactions with it, and even use websites like CaptainAltcoin.com to trade the currency with automated bots. There’s no doubt that bitcoin is one of the most significant cryptocurrencies available right now. It’s moving upwards, too. As more people adopt bitcoin it’s only going to get more popular and therefore more valuable. If you’re giving anyone a crash course in cryptocurrency, it would be churlish not to begin with bitcoin.
If you’re following cryptocurrency, you’ve probably heard of Ethereum. This cryptocurrency completes transactions remarkably fast. Where bitcoin usually takes around 10 minutes to complete a block in its blockchain, Ethereum takes just 12 seconds. Unlike bitcoin, only around 50% of Ethereum has been mined so far. So there’s more up for grabs for the wider community. Ethereum hasn’t set an upper limit on its total coin supply. Although this could cause concerns around inflation and devaluing of Ethereum, founder Vitalik Buterin has already brought an Ethereum Improvement Proposal forward to limit the total Ether supply and bring Ethereum back under control. There’s more of an emphasis on development and app creation with Ethereum; it’s also a global computer network which allows developers to create apps without third-party interference.
You’ve probably heard the phrase “bitcoin’s little brother” when it comes to litecoin. That’s both fair and not fair. Litecoin is certainly lither than bitcoin – its transaction speeds are much quicker than its larger sibling – but it’s no less interesting or technologically valuable. Litecoin has a significantly higher token limit than bitcoin. Where bitcoin is limited to around 21 million individual bitcoins, Litecoin comes in at four times that value: 84 million tokens. Theoretically, that means you could mine significantly more litecoin than bitcoin. There are drawbacks, of course. Litecoin is much, much more resource-intensive to mine than bitcoin, which limits the pool of those who can mine it even further than bitcoin. It’s also got a market cap of around 1/20th of bitcoins.
Are you worried about the direction in which online advertising is headed? Perhaps you need a crash course in BAT if you are. BAT (or Basic Attention Token) essentially rewards you for spending time on the internet. This model aims to streamline digital advertising by exchanging currency directly between publishers, advertisers, and users, with no need for third-party interference. BAT runs on the Ethereum blockchain, so it’s using the same security protocols as that cryptocurrency does. It might sound a little Black Mirror-Esque, but BAT is arguably the future when it comes to digital advertising. You get paid to browse the web and consume advertisements, and advertisers get an audience. Everyone wins.
Bitcoin cash launched way back in summer 2017. There are several crucial differences between bitcoin cash and standard bitcoin. The main difference is the block size. Bitcoin cash implements an increased block size of 8MB compared to bitcoin’s 1MB, accelerating transactions significantly. There’s an adjustable level of difficulty in bitcoin cash’s blocks to ensure the blockchain will hold up no matter how many miners are supporting it. Some think that this makes bitcoin cashless secure, but on the flip side, it’s arguably more long-lasting than bitcoin. The founders of bitcoin cash were concerned that the introduction of the segmented witness technology (SegWit2x) to bitcoin was undermining its status as a decentralised and democratised currency, so they created bitcoin cash to address this issue.
Ripple was created largely to serve as an alternative to the current banking payment system of SWIFT. It was developed as a digital currency for banks and payment networks rather than for goods and services payments. There are some who think this means Ripple is going directly against the purpose of cryptocurrency, but it’s undeniable that Ripple is gaining some traction amongst businesses. Also unlike bitcoin, Ripple does have a central authority: it’s run by a company called Ripple (funnily enough) which has offices in Australia, the UK, and Luxembourg. Ripple’s goal is primarily the transfer of currencies and commodities between larger organisations, so whether or not you class it as a cryptocurrency will depend on your personal definition of the word.