BITCOIN, ALTCOINS, AND INNOVATIO
Bitcoin began operating in January 2009 and is the first decentralised cryptocurrency, with the second cryptocurrency,Namecoin, not emerging until more than two years later in April 2011. Today, there are hundreds of cryptocurrencies with market value that are being traded, and thousands of cryptocurrencies that have existed at some point.
The common element of these different cryptocurrency systems is the public ledger (‘blockchain’) that is shared between network participants and the use of native tokens as a way to incentivise participants for running the network in the absence of a central authority. However, there are significant differences between some cryptocurrencies with regards to the level of innovation displaye.
The total cryptocurrency market capitalisation has increased more than 3x since early 2016,
reaching nearly $25 billion in March 2017
ETHEREUM (ETH)
Decentralised computing platform which features its own Turing-complete programming language. The blockchain records scripts or contracts that are run and executed by every participating node, and are activated through payments with the native cryptocurrency ‘ether’. Officially launched in 2015, Ethereum has attracted significant interest from many developers and institutional actors.
DASH
Privacy-focused cryptocurrency launched in early 2014 that has recently experienced a significant increase in market value since the beginning of 2017. In contrast to most other cryptocurrencies, block rewards are being equally shared between miners and ‘masternodes’, with 10% of revenues going to the ‘treasury’ to fund development, community projects and marketing.
MONERO (XMR)
Cryptocurrency system that aims to provide anonymous digital cash using ring signatures,confidential transactions and stealth addresses to obfuscate the origin, transaction amount and destination of transacted coins. Launched in 2014, it saw a substantial increase in market value in 2016.
RIPPLE (XRP)
Only cryptocurrency in this list that does not have a blockchain but instead uses a ‘global consensus ledger’. The Ripple protocol is used by institutional actors such as large banks and money service businesses. A function of the native token XRP is to serve as a bridge currency between national currency pairs that are rarely traded, and to prevent spam attacks.
LITECOIN (LTC)
Litecoin was launched in 2011 and is considered to be the ‘silver’ to bitcoin’s ‘gold’ due to its more plentiful total supply of 84 million LTC. It borrows the main concepts from bitcoin but has altered some key parameters (e.g., the mining algorithm is based on Scrypt instead of bitcoin’s SHA-265).
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