While for many the terms ‘Bitcoin’ and ‘cryptocurrency’ might be synonymous for some, the emergence of Bitcoin has in fact cultivated a wider ecosystem of digital currencies that each have different purpose, utility, and market capacity.
While Bitcoin was designed to serve as a digital currency used in global, peer-to-peer transactions, both persons, teams of developers, and even companies have begun to use blockchain technology to create decentralized currency projects that have thousands of interesting – and highly investible – applications.
For those looking to buy cryptocurrency, Bitcoin might be a fantastic start – yet there are numerous other projects each vying for investment.
Frequently touted as Bitcoin’s ‘arch-rival’, Ethereum compliments the original cryptocurrency rather than truly compete with it.
Sometimes referred to as the Ethereum Platform, Ethereum leverages blockchain technology to harness programming codes for internet-based (or decentralized) applications – in the past, people around the world have used Ethereum to not only create apps, services, or games, but have further created their own online organizations and cryptocurrencies using the platform.
Ethereum is most recognised for its ability to run what are called smart contracts – these are essentially applications that will run as programmed without fear of downtime or interference. Though Ether can be used to trade for products and services, the cryptocurrency wasn’t originally intended for everyday payments.
Litecoin saw its origins as a ‘fork’ (or derivative) of Bitcoin, and is sometimes compared to silver whereas Bitcoin might be likened to gold.
Litecoin differs from Bitcoin in several key ways; particularly, the cryptocurrency enjoys a total supply of some 84 million units as opposed to the 21 million coins that comprise Bitcoin.
Litecoin further offers a decreased block generation time (at 2.5 minutes, meaning that transactions are completed far more quickly compared to the speed of the Bitcoin network) and uses a different mining algorithm.
CoinInsider reports that, given these properties, Litecoin has been met with growing warmth by both investors and institutions; the latter of which have begun to slowly accept the newer cryptocurrency as a payment standard.
Short for Digital Cash, Dash is a cryptocurrency that can be used for transaction between parties, and has several differences between itself and other cryptocurrencies – most notably, Dash can be used to either make public (transparent) transactions between parties, or can be used for private transactions where the cryptocurrency is capable of ‘hiding’ transferred amounts in-between batch sends – making it difficult for an analyst or observer to trace the origin of a transaction and its recipient.
Dash is also comprised by what is called a ‘decentralized autonomous organization’, where consensus and management of a treasury system is handled by a distributed network of contributing computers (or ‘nodes’) around the world. This treasury system can not only pay out values to users or groups for helping to improve Dash, or to even fund new integrations with major cryptocurrency exchanges or online services.
Similar to the principle that powers Dash’s private transactions, Zcash is often tipped as the first ‘zero-knowledge’ cryptocurrency wherein the identity of senders, recipients, and even transferred values are fully encrypted.
This means that while Zcash uses blockchain technology to be distributed and immutable (and hence trustworthy) the cryptocurrency, it can do so without disclosing ‘private’ transaction information and hence negates the risk of inadvertently compromising private transaction information.
In this regard, Zcash has been embraced as a leading ‘privacy coin’, where traders on the internet can transfer value without broadcasting potentially sensitive information.
Sometimes regarded as a ‘darkcoin’, Monero is a cryptocurrency designed to afford its users with total control over both their money and its eventual distribution.
Monero works on the principle of being ‘selectively transparent’ – meaning that users who wish to transact are in control and can determine whether the public is able to interpret the public addresses of senders and recipients as well as any amount transferred.
While Monero is sometimes criticized for the fact that it is frequently used by cybercriminals thanks to its focus on privacy and its ability to obfuscate transactions, the cryptocurrency boasts a large decentralized development community and is the subject of continual improvement.