Bitcoin's Major Competitors in the Cryptocurrency Industry
Types of cryptocurrencies
When it comes to digital currency, one leads the pack. We're talking about Bitcoin (BTC), the first and still the most popular in this nascent industry of cryptocurrencies.
As the initial currency built with blockchain technology and utilising a decentralised Peer-to-Peer (P2P) network, Bitcoin is more than just the face of the industry. It is the industry.
But is that a tiny crack is showing in the juggernaut that is Bitcoin? The custom has been to refer to the hundreds of alternative cryptocurrencies simply as altcoin, but maybe that is changing just a little. Here is a short list of the contenders in the digital currency marketplace.
Litecoin (LTC): This was one of the first cryptocurrencies to arrive on the scene when it hit the market in 2011, just two years after Bitcoin. If Bitcoin is gold, then Litecoin is probably silver. Created by a former Google engineer and MIT graduate, Charlie Lee, there are a few consumer advantages inherent in this particular digital currency. Like Bitcoin, Litecoin runs on a distributed database that requires "mining" to verify transactions and earn rewards. Unlike Bitcoin, Litecoin miners can compete in this process with a standard computer powered by a typical CPU. Since more people can participate without the need of a particular ASIC rig, transactions are approved faster. Merchants and consumers alike approve of this.
Ethereum (ETH): Though a relatively new kid on the block, having launched in 2015, Ethereum trails only Bitcoin and Ripple in market capitalisation with around $41 billion. What this means for developers is that they have the freedom to spend time and money improving the product, which is a good thing. Ethereum incorporates the idea of a distributed database but markets itself as a platform by which you can secure, decentralise, and trade just about anything. This currency's creators seem intent on taking their ideas to more industries through the creation of the Ethereum Individual Retirement Account and selling blockchain technology as a service for companies seeking greater security.
Zcash (ZEC): (https://z.cash/) Whether Zcash is actually the most secure cryptocurrency might be a matter for some debate. Maybe it's just a marketing gimmick. If so, in this current climate of hack attacks run amok, it's a great idea to focus on more security. This decentralised currency arrived in 2016 - it's just a baby - but defines itself this way: "If Bitcoin is like http for money, Zcash is https."
Zcash goes above and beyond even the high-security standards of Bitcoin by offering to keep all transactional details private: sender, recipient, and amount. All this happens via advanced cryptographic techniques developed by the Zcash team.
Dash (DASH): Dash, was initially marketed under the name Xcoin (XCO) and Darkcoin. With the somewhat sinister nature of that moniker, realised they had a problem and the reality that it had become a haven of sorts for money launderers and drug deals, Darkcoin rebranded to Dash in 2015. Today Dash operates with the same technology and service, but with a continued focus on user anonymity.
While all cryptocurrencies bill themselves as transactionally untraceable, that’s not always the exact truth. With Bitcoin, for example, you can track a particular transaction down to a single user identification. Dash’s method of bundling transactions comes much nearer to the goal of not being able to sort out individual transactions.
Ripple (XRP): Ripple has taken a different path than the other cryptocurrencies on this list. For example, it does not employ the distributed database idea that has made other digital currencies so popular. That's right. Hypothetically, the founders remain in control of the database and could manipulate it. On the other hand, Ripple never intended to be a medium of exchange but instead markets itself as a service that helps banks and other financial institutions send and receive money across borders safely and efficiently through the use of the XRP cryptographic token. If rising price and market capitalisation is any indicator, Ripple might be onto something big.
Monero (XMR): Let's take a look at Monero. Secure? Check. Private? Check. Untraceable? Check. Yep, it has all the earmarkings of a real digital currency. Where Monero diverges from the mainstream cryptocurrency business model is in the fact it is entirely donation-based (which means a market cap of $0) and thrives more as a community of true believers in the product.
Like some of the others, Monero has achieved true transactional un-traceability through the use of what it calls "ring signatures," where a real sender or receiver is thrown into a group of others, making it impossible to sort out the transaction's actual participants.
THE BOTTOM LINE
While Bitcoin leads the cryptocurrency pack in a good way, the reality is that no industry remains in the hands of a single participant forever. Expect, like Apple and Microsoft, that Bitcoin's market share will erode over time as more competitors arrive to test the waters. Unless Bitcoin does something silly to screw it up, they'll probably always remain a viable interest and maybe even stay the Big Kahuna. As to which of the current crop of altcoin cryptocurrencies will eventually pose a serious threat, who knows? It might turn out to be one that hasn't been invented yet. But one thing is for sure. Cryptocurrencies are here, and they're here to stay.