An Overview Of Bitcoin Alternativesby Fintechnews Singapore June 28, 2016
While many around the world remain skeptical that cryptocurrency can really demonstrate significant staying power, Bitcoin has had a surprisingly resilient 2016. For reference, it was priced at about $430 on December 31, 2015, and is hovering around $625 as of the time of this writing (having reached a peak of $768 in mid-June).
Even the recent news that the UK would be enacting the “Brexit” plan to leave the European Union, which sent global markets into a devastating free-fall, couldn’t phase the leading cryptocurrency. One analysis pointed out that at least Bitcoin is doing OK, and that it has worked its way in alongside gold as a perceived “safe haven” in times of economic uncertainty. Frankly, if Bitcoin advocates were looking for a gauntlet that proved the digital currency’s worth, 2016 has answered the call.
Despite all these positives, however, there remain many who are curious about crytpocurrency but distrustful of Bitcoin. There are fair points to be made that Bitcoin is more flash than substance, and while the price has performed well in 2016, the turbulence is a little unsettling. Even if $625 looks good at this moment, the fact that it was at $768 two weeks ago is a little bit alarming. That’s not a margin most people would be particularly comfortable with in an ordinary asset. Furthermore, with regard to practical use (rather than investment), Bitcoin hasn’t quite taken off the way many hoped it might. While there are more and more stores both online and in person accepting Bitcoin, it’s not even close to becoming a viable everyday alternative to currency.
For this reason, as well as because there has long been a contingent of analysts predicting that Bitcoin is merely paving the way for other cryptocurrencies to emerge, many remain intrigued by alternatives to Bitcoin. These alternatives are sometimes referred to in a group as “Altcoin” and it may surprise you to learn that there are literally hundreds of them springing up here and there every year. Naturally, most of them remain relatively obscure, but there are some pretty strong Altcoin options out there to keep your eye on if you’re intrigued by cryptocurrency but suspicious of Bitcoin for whatever reason. Here are a few to remember.
Sometimes cited as the second most widely known cryptocurrency after Bitcoin, Litecoin is in some ways the leading alternative. Basically, this one works just like Bitcoin, though some like that Litecoin actually easier to “mine” (which basically means going through complex computer operations to obtain original currency, rather than buying existing currency from someone else). Bitcoin essentially requires a supercomputer and/or math genius for mining, whereas Litecoin can be mined on an ordinary computer system.
Almost more of a transaction system than currency unto itself, Ripple is intriguing to a lot of people. In essence it works similarly to Bitcoin (and has a similar blockchain), but it’s also unique in that it facilitates transfers involving any kind of currency, including air miles. Ripple can convert these currencies into XRP, its own currency or credit, for users to do what they please with.
As a currency, Primecoin operates much like Bitcoin. But what some people like about it is that its mining process is different, and it operates without a pre-determined cap. There will never be more than 21 million Bitcoins in circulation, but Primecoins could theoretically be created infinitely. This is done by finding chains of prime numbers in the blockchain, rather than by verifying previous transactions (which is basically how Bitcoins are mined).
Dogecoin is basically the simplest and cheapest alternative out there. It’s built on top of the Bitcoin concept, though like Primecoin it can be mined infinitely. Odds are that this one is never obtaining very serious value, but it has carved out a unique function of its own, essentially as an online tipping service. It’s not uncommon for Dogecoin users to basically toss others a few Dogecoins simply for doing a nice job with an online service of some kind.
It remains to be seen what really happens with Zcash in the months and years ahead, but it launched in Alpha earlier this year as an attempt at becoming the first legitimately untraceable digital currency. Bitcoin users love Bitcoin for its anonymity, but this has always been a little bit of a gray area. Just as it thrives on the anonymity of users, Bitcoin also operates on a system that makes every transaction 100 percent traceable. Zcash seeks to do away with the latter, providing simple, complete anonymity for its users.
As mentioned, there are actually hundreds of Altcoins out there, and there are a few more that have gained a certain level of prominence in the growing cryptocurrency market. But these are five that stand out in particular, and five worth keeping in mind if you’re interested in Bitcoin alternatives.