Not just Bitcoin: cryptocurrencies to keep an eye on
The boom over the past few months has piqued interest surrounding Bitcoin. Enthusiasts and miners have known about cryptocurrency for years, while everyone else is just now learning what it means to manage a digital portfolio, watch your loot grow, and, unfortunately, see sudden and unexpected drops in value.
In just a few months, the Bitcoin exchange rate jumped from around 8 thousand dollars to over 15 thousand dollars, and then settled at a slightly lower rate, where it still stands today (fluctuating between 10 and 14 thousand dollars). There’s another outcome of this clamor surrounding the currency: the opening of physical and online stores where coin payment is accepted, a trend that has further cemented the position of this currency as a transaction tool recognized worldwide.
Bitcoin owes its success to its underlying logic: blockchain. Through the self-validation of blocks exchanged among savers, the web has discovered a fast and secure method of moving currency anonymously. Its quick spread throughout the dark web owes itself to the possibility of purchasing often-illegal products and services without leaving any trace, and it’s paradoxical how much an outlawed tool has the power to also improve already-consolidated economical and financial processes (and more).
In what sense? Public administrations, hospitals, and even credit institutions have jumped on the blockchain bandwagon, as in this way they can forge new relationships of trust with their clients, ensuring exchanges of information free of breaches and data loss (especially in a healthcare environment).
The limitless rise of these cryptocurrencies shouldn’t come as a surprise. While Bitcoin is at the top of a perfect list of the most-used cryptocurrencies, there are at least five other close relatives that have the potential to make it big and do even better than the driving force created by Satoshi Nakamoto, the name behind the first-ever transaction via blockchain.
There isn’t a single hidden-web user that doesn’t know about this currency. The inventor behind Ethereum is mathematician Vitalik Buterin, who applied the blockchain theory to an ecosystem that goes well beyond the sole option of paying with or exchanging encrypted currency. Under the umbrella of the Enterprise Ethereum Alliance, applications were created for more varied uses, from financial management to chats. These apps were developed by independent software houses, but also by companies the calibre of Microsoft, Samsung, and JP Morgan, just to name a few. For the global audience, the reference portal is OpenBazaar, a type of Amazon where you can pay with secure currency.
More or less the same age as Bitcoin, Litecoin stemmed from the mind of Charles Lee, a former Google employee. Along with other currencies, it shares the blockchain, but enjoys an enormous advantage: thanks to a new algorithm, the coin limit is greater and not capped at Bitcoin’s 21 million. This means that, based on a series of numeric calculations, it has been established that the cryptocurrency par excellence cannot go beyond the amount of said limit, so it is considered more like a rare good (such as gold) than a substitute for dollars and euro. Instead, Litecoin has a broader future ahead of it, at least in terms of mining and availability.
When we speak about anonymity in the financial sector, we can’t not mention Monero. The currency in question has taken the value of the blockchain to the extreme. While this technology does indeed allow for digital money to be transferred free of references that can lead back to actual identities (each saver carries only a transaction hash, nothing more), Monero uses a solution called ring signatures to make it even more difficult to trace coins among contracting parties. It does so by assigning each exchange a signature that doesn’t lead back to a single user, but rather to the block to which he/she belongs, in order to protect members with a greater level of abstraction.
This is the cryptocurrency of the moment. In 12 months, its value has surged by about 35,000%, with an exchange rate reaching 2.5 dollars, when one year ago it was at 0.006 dollars. Very little in comparison to Bitcoin, but only because the latter started off on a wider exchange base. The rise of Ripple owes itself to a consortium of Asian banks, which announced it wanted to use the proprietary token to create a new type of credit card free of breaches or hacker attacks: all this would be simplified by a central management system, very similar to the one used by classic credit institutions.
The legitimate offspring of Bitcoin, NEM was created by cryptocurrency’s earliest fans. Relatively young (March 2015), it combines the logic of Ethereum with the creation of a broader ecosystem, where the exchange of money is only one of its many elements. In fact, in the NEM universe, there’s a messaging service, Internet domain management, corporate assets, and much more. Its use is popular in Japan, even at an institutional level, and therefore you should keep an eye on its growth, seeing as sooner or later its value will also explode over on our side of the world, following greater expansion on a global level.