5 Cryptocurrencies You Should Be Watching
In terms of cryptocurrencies, Bitcoin certainly receives a majority of the mainstream spotlight — with many even referring to it as digital gold. While Bitcoin is extremely important to the cryptocurrency market, there are also many other well-performing cryptocurrencies that you should know about. With the apparent success of Bitcoin, the cryptocurrency ecosystem has become extremely diverse and about 1,000 competing coins are now available. If you are considering investing in cryptocurrency, the following coins may be worth exploring.
Bitcoin was released in 2009 by Satoshi Nakamoto, making it the oldest cryptocurrency. Through the year following its release, Bitcoins were only mined and never traded. Mining Bitcoin requires the use of a powerful computer processor, which are costly and can be expensive to operate due to energy costs. Without the option to trade these coins, they were not only worthless, but costing people money. That is, until the first reported transaction made using this Bitcoin was made in 2010: an exchange of 10,000 BTC for two pizzas.
Although Bitcoin did manage to reach a value of $1,000 by 2013, in the same year, it also experienced a major crash that brought its value plummeting down to approximately $300. Yet within two years, Bitcoin had resurged back to the $1,000 mark and is continuing to grow consistently. Currently, the value of a Bitcoin fluctuates between $10,000 and $20,000. This makes them inherently valuable and they are now accepted forms of currency for a variety of merchants around the world.
Vitalik Buterin proposed Ethereum in 2013, but it went live in 2015. Ethereum can be used to process transactions just like Bitcoin, but unlike Bitcoin, it can also be used to process smart-contracts and complex programs.This young cryptocurrency receives high praise from industry thought leaders due to the higher level of functionality it offers compared to Bitcoin. The Ethereum network allows users to build their own blockchain applications using the Ethereum platform. The transaction fees and computational services that occur during this process are paid for by using ETH. This means companies must mine or purchase ETH in order to leverage the Ethereum platform. With this system of supply and demand in place, as more organizations move to host their own blockchain applications on the Ethereum platform, the value of ETH should see steady growth.
Charlie Lie developed Litecoin and released it in 2011. Soon after, Litecoin had been dubbed as the digital silver of the digital gold (Bitcoin). Litecoin mining does not require the same high-end computer processor equipment that Bitcoin mining does. Instead, the Litecoin mining algorithm is solved using the memory of a computer. Because memory is far less costly and more accessible component, this means that nearly anyone with a computer can mine Litecoin. It also means that LTC transactions can be confirmed in far less time than transactions made using Bitcoin.
Monero is a privacy-oriented cryptocurrency that was launched in April 2014. Bitcoin attempts to keep user identities entirely private by providing them with user addresses that are randomly generated strings of letters and numbers. This is only partly effective though, because each user address and transaction is permanently recorded within the blockchain. Although the user address doesn’t contain any personal data, it may be possible to identify someone based on the purchasing habits associated with an individual user address. In fact, law enforcement agencies have been reported to use blockchain analytics to track Bitcoin transactions.
Monero was designed to provide a greater sense of anonymity to its user base using ring signatures and stealth addresses. A ring signature takes the account keys of several users from within the Monero blockchain and marks them as possible signers for a transaction, preventing anyone from determining which specific user was actually responsible for the transaction. Stealth addresses are one-time addresses that are created for each transaction. Users also have a published address, but the transactions they receive will always go to unique addresses. Monero is an underdog in the cryptocurrency ecosystem, but the niche benefits of enhanced privacy features have allowed it to stay relevant.
Verge is a crypto coin that began trading in October 2014 and is designed to prioritize privacy for its users, much like Monero. Verge is built quite similarly to Bitcoin, but Verge has additional i2p and Tor based privacy features that users can opt-into. These features are designed to protect users against traffic analysis, which is a form of network surveillance that could compromise confidential transaction data. Verge coin routes user transaction data through several servers located across the globe, with each new server wiping the information of the previous server. This process ensures that after the transaction is sent through the exit node server, the currency trail will be virtually untraceable.
Each cryptocurrency has its own unique properties: Litecoin was built to expedite the transaction confirmation process and make mining more accessible to everybody; Ethereum was structured to facilitate the production of blockchain applications; Monero and Verge offer stand out privacy features. With this in mind, you should recognize that monetary value is not the only thing to consider when entering into the cryptocurrency market. To make the most informed cryptocurrency investment decisions, you must take into account the specific consumer needs that each cryptocurrency was designed to fulfill.