Crypto Needn’t Be Cryptic: Your Guide To Digital Coins
Bitcoin is still the big boy in blockchain technology and the undisputed king of digital currencies. Bitcoin is regarded as the forerunner and category-defining originator of all aspects blockchain – the groundbreaking new method of managing data and payment transfer, from which many other impressive digital currency initiatives and start-up projects have since come up.
Blockchain technology basically enables data to be distributed rather than copied, and Bitcoin was the first real-life manifestation of this technology in the year 2009 when a team of programmers launched the open-source software under the name Satoshi Nakamoto. This immediately had the global tech community brimming with excitement and anticipation. The numerous potential benefits for the future of digital transfers, especially regarding payments was now evident. The very essence of Bitcoin – and the blockchain as well – is that transactions be conducted between users directly without the need of an intermediary. These transactions are verified by network nodes after which they are recorded in a public ledger so that they are available for everyone to see. For this, Bitcoin is also viewed as a decentralized cryptocurrency, and it is the first of its kind.
No one owns the Bitcoin network which is much like nobody owns the technology behind the Internet or email. All Bitcoin transactions are usually verified by Bitcoin miners. Moreover, all the users must work with the same operational rules and software, making Bitcoin the epitome of democracy in cryptocurrency. Bitcoin can no longer be defined as a technological brainwave. It now has a genuine, transferable value and could be exchanged for other products, services, and currencies in legal markets. There are thousands of ATMs across the globe, and there are places where you could pay for university fees or groceries using Bitcoin.
Bitcoin has undoubtedly been the investment sensation of the last decade. Available for only a few cents in 2009, Bitcoin has been trading for thousands of US dollars this year. There is no doubt that Bitcoin has really earned some people a lot of money. Its explosive growth as a technical innovation and volatility as an investment asset make it a lucrative investment for currency traders.
While many people still consider Bitcoin as the king of cryptos – for now, at least – Ethereum is undoubtedly the closest challenger to its throne. Ethereum is one digital currency that many people believe has the highest chance of matching and even surpassing the incredible allure of Bitcoin. Ethereum uses the same blockchain technology like Bitcoin. Unlike Bitcoin, however, Ethereum is not only about creating a new network of online payments and its potential goes way beyond that. Besides running its own digital currency – ether – it also supports smart contracts which are merely agreements that are written in computer code that sit on the platform and perform transactions automatically when specific conditions are met. This is what makes Ethereum a beast different from other cryptos. And as some pundits prefer to describe it, we could say that while Bitcoin has created a new, alternative online payment means, Ethereum is laying the foundations for a whole new internet.
In the long run, developers who use Ethereum blockchain could end up creating systems and apps in a way that cuts out the need for a central intermediary. Imagine, for instance, a world where banks are not required to service loans, or insurance brokers, or estate agents for property. With the Ethereum apps, you cannot, in theory, have an individual destroy, tamper or corrupt the data because it effectively exists across many places on the network. It will eventually be more secure, and there will be no or close to zero downtimes.
In its concise history, Ethereum has undergone a considerable transformation, and there are now two strands of Ethereum, Ethereum Classic (ETC) and Ethereum (ETH). The original Ethereum platform was split into two in June 2016 when a hacker exposed a technical loophole in the currency. In this ensuing mess, there were two trains of thought concerning how to best evolve both platforms, and it resulted in a divergence, also referred to as a “hard fork” in crypto circles. Ethereum Classic, which argues that the platform’s concept of ultimate democracy must prevail, despite the risk of attacks has eventually grown slower than Ethereum, which reasons based on the need to provide further control to a small group of developers.
Whichever broad church of Ethereum you belong – and most people are glad to be in both – the potential for this cryptocurrency to transform our lives is just mind-boggling and no wonder it has caught the imagination of many. However, you should remember that this excitement is still firmly focused on the coin’s future potential – the realization of which could still be a long way off. This is what makes it incredibly appealing to the investors who might see it as an opportunity to invest now while the crypto is still in its early days and hence can be bought at what will probably be seen as a meager price in a decade to come.
Ethereum Classic (ETC)
In spite of its formative years, there has already been a conflict in the Ethereum community and a split in the technical development of the Ethereum blockchain platform – commonly referred to as a “hard fork.” Ethereum Classic was born out of the first Ethereum platform and the philosophy that technology must operate in a manner that was entirely democratic across the user-base. After an attack in 2016 when large amounts of money were siphoned off by a hacker thus exposing a technical loophole, the Ethereum community did not know how to react. A massive amount of money was at stake and a large section of the Ethereum community, which forced the issue and altered the basic belief-system around how this crypto could successfully grow.
One section in the community started a plan that was aimed at refunding the money that had been siphoned by introducing a smart contract and incorporate security measures to mitigate such attacks in future. This proposal was met with a lot of controversies and there was a split. Those who were against the proposal did not accept to move to the new blockchain and opted to remain in the old blockchain, eventually changing the name to Ethereum Classic.
A majority of the people moved to the new blockchain, including most of the big players in the community and indeed the founders Gavin Wood and Vitalik Buterin. While Ethereum Classic might not have the forward momentum of Ethereum regarding the pace of technological advancement and increasing value, it remains an area of interest for investors, traders and developers as well. While there are reportedly many scammers in the ETC platform which has put many people off, this crypto still garners considerable attention mainly because of its unique potential.
Will Ethereum Classic fade away as Ethereum surges forward, breaking new ground? Or will the champions of the real blockchain democracy discover a way to revitalize Ethereum Classic, inject some new life into it and prove the doubters wrong?
Dash is a type of digital currency that is primarily based on the Bitcoin software that mainly focuses on scalability and privacy as its main distinguishing features. One can make instant, private payments in-store or online using this secure open-source platform hosted by thousands of users. And its technology is expanding really fast. In that sense, Dash has solved most of the problems inherent in Bitcoin, which have revolved around inabilities to scale quickly and become a reliable mass-market mainstream offering and slow transaction speeds. Dash has been designed from the beginning as a user-friendly and scalable currency platform ideal for mass adoption.
Besides the conventional rewards for mining Dash, the users are also rewarded for running and maintaining the specialized servers called ‘masternodes.’ Dash works on a two-tier network. The first tier tends to operate like that of the Bitcoin network while the second layer, which is comprised of specialized servers popularly known as masternodes, allows for additional operating features like private transactions, instant transactions, and decentralized budgeting and governance. It is the second tier that gives this crypto a competitive edge.
Dash means business, and it has created a team based in Hong Kong that will focus on developing custom hardware. Meanwhile, the core team focuses on increasing speed, scope and size with every development stage, doubling the number of developers with every release. Additionally, the core team is also committed to publishing comprehensive documentation to guarantee ultimate trust and transparency in the platform’s evolution.
Ripple, also referred to as the Ripple Transaction Protocol or Ripple Protocol is a real-time settlements and payments system which also operates as a currency exchange. Ripple boldly claims to enable instant, secure and nearly free global financial transactions of any magnitudes without any chargebacks. Just like Bitcoin software and various other blockchain technologies, Ripple is primarily built on a consensus ledger and distributed open-source protocol where the users in the system confirm and agree on transactions.
The beginnings of Ripple are actually earlier than Bitcoin and blockchain in many different aspects. In the year 2004, Ryan Fugger had a vision that he wanted to develop a decentralized monetary system that mainly relied on communities and individual users and eliminates the governmental authoritarians and middle-men. He created RipplePay, which was a financial service that was aimed at providing secure payment options in an online community. Through the years, Fugger consistently expanded and refined his concept, working with many other digital payment developers and entrepreneurs.
Ripple came into the limelight in 2012, and it is currently one of the largest cryptocurrencies in the world and is actively used by popular financial businesses like Santander, UBS, and UniCredit. The Ripple protocol has undoubtedly excited the major payment networks and banks with its incredible settlement infrastructure and advanced technology, particularly the security and low cost it offers.
That in mind, we must not forget that this is still early in the grand scheme of things. While there are household brand names that are actively using this digital currency, they are doing it in a controlled manner. And there are many more big commerce giants and financial houses that are yet to fully commit, just assessing the options from a distance.