It seems like a whole host of cryptocurrencies have move up overnight, and many people are understandably confused. While it has attracted many investors, the cryptocurrency market is wild and, at times, unpredictable.
While many cryptocurrencies emerge with the sole intent to draw investors and make money quickly, some present the opportunity to innovate and experiment with cryptocurrency technology.
BITCOIN
Bitcoin is the currency that started it all. The whole cryptocurrency industry uses it as a gold standard and it is now widely accepted as a form of payment across the world, with over 200,000 transactions per day, many of those pertaining to illicit drugs and other dark web activity.
ETHEREUM
Ethereum is Bitcoin’s biggest competitor and has evolved to perform multiple functions, as the blockchain technology it is built on allows developers to create decentralised applications. The currency that Ethereum uses is known as Ether, a cryptocurrency token similar to Bitcoin. However, the main purpose of Ethereum is to create smart contracts, which refers to the ability to create transactions exchanging shares, property, content, money and the like in a decentralised, secure fashion.
RIPPLE
Ripple is an unpopular project among cryptocurrency aficionados. Its currency is known as XRP and, unlike Bitcoin, the company has full control over it and is responsible for circulation, not the users. It cannot be mined as it is not an actual currency, but rather a ‘token’ which is used to represent traditional currencies. Its key purpose is to facilitate quick money transfers across the world. Some transactions only take a few seconds to process as Ripple was created to help pay transaction fees across different banks. So when two different banks both accept Ripple, the fees are quickly processed and the money transferred.
LITECOIN
Litecoin was developed to be faster than Bitcoin with more tokens available and a different mining algorithm. Initially it was prominent however its popularity has now faded. Despite this, some people continue to trade and hoard the currency as a Bitcoin backup.
MONERO
Monero was designed to have more privacy than Bitcoin, which documents every transaction and leaves a trail. This cryptocurrency claims to be 100% untraceable and as a result it has been popular among dark web market places, for obvious reasons. A key feature of Monero is that the transaction history of the currency is unknown, meaning that if your Monero tokens have been used previously in an illegal transaction, there is no trace of this. Another benefit is that you can selectively reveal transaction details, for example if you are being audited. While Monero is lauded for its privacy and security, it is not beginner friendly, therefore it is a less popular cryptocurrency.
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