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Since Bitcoin’s creation in 2009, hundreds of new cryptocurrencies have been created. While most of these “altcoins” are very similar to Bitcoin, a few have developed unique features and functions. Some of the more notable coins include Ethereum, Litecoin, and Monero. In this article, we will provide an overview of the top five crypto coins by market capitalization.
Bitcoin is a cryptocurrency, a form of electronic cash. It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. Bitcoin is created as a reward for a process known as mining. They can be exchanged for other currencies, products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third party interference.
Ethereum ishow people are building decentralized applications. Decentralized applications have the potential to profoundly disrupt hundreds of industries including finance, real estate, academia, insurance, healthcare and the public sector amongst many others.
Ethereum is unique in that it allows developers to build these decentralized applications in a way that is accessible to everyone. developers can create markets, store registries of debts or promises, move funds in accordance with instructions given long in the past (like a will or a futures contract) and many other things that have not been invented yet, all without a middleman or counterparty risk.
The ethereum blockchain is fueled by ether, which is also used to pay for transaction fees and computational services on the ethereum network. Ether can be transferred between accounts and used to compensate participant nodes for computations performed. Ethereum provides a decentralized Turing-complete virtual machine, the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes. “Gas”, an internal transaction pricing mechanism, is used to mitigate spam and allocate resources on the network.
Ethereum was initially described in a white paper by Vitalik Buterin, a programmer involved with Bitcoin Magazine, in late 2013 with a goal of building decentralized applications. Buterin had argued that Bitcoin needed a scripting language for application development. Failing to gain agreement, he proposed development of a new platform with a more general scripting language.:7 In 2013, Ethereum was proposed as an alternative to Bitcoin by Vitalik Buterin. Developers originally planned to launch Ethereum at the North American Bitcoin Conference in Miami, Florida, but subsequently postponed it until July 30 due to publisher problems with their distributor Macmillan Science’s Tor Hidden Service being inaccessible at the time.
Litecoin is a cryptocurrency that enables instant payments to anyone in the world and that can be efficiently mined with consumer-grade hardware.
Litecoin is a fork of the Bitcoin Core client, differing primarily by having a decreased block generation time (2.5 minutes), increased maximum number of coins (84 million), different hashing algorithm (scrypt, instead of SHA-256), and a slightly modified GUI.
Bitcoin Cash is a cryptocurrency that is a fork of Bitcoin. Bitcoin Cash is a spin-off or altcoin that was created in 2017. In 2018, Bitcoin Cash subsequently split into two cryptocurrencies: Bitcoin Cash, and Bitcoin SV. Bitcoin Cash is sometimes also referred to as Bcash.
Bitcoin Cash is different from Bitcoin in that it increases the block size from 1 MB to 8 MB. It also removes Segregated Witness (SegWit).
Ripple is a real-time gross settlement system (RTGS), currency exchange and remittance network by Ripple. Also called the Ripple Transaction Protocol (RTXP) or Ripple protocol, it is built upon a distributed open source Internet protocol, consensus ledger and native cryptocurrency abbreviated as XRP (ripples). Released in 2012, Ripple purports to enable “secure, instant and nearly free global financial transactions of any size with no chargebacks.” It supports tokens representing fiat currency, cryptocurrency, commodity or any other unit of value such as frequent flier miles or mobile minutes.
Ripple Labs Inc., the creator and developer of the protocol, has gained praise for its features aiming to become a decentralized platform that allows for low-cost international payments. In particular, compared with other cryptocurrencies like Bitcoin and Ethereum, which can only perform basic payments and transfers, Ripple’s underlying technology can handle more complex transactions like currency swaps and decentralized exchanges. Nevertheless, some experts have raised concerns over whether XRP actually solves any real problem andcriticized Ripple Labs for its poor decentralization.
The bottom line is that there are many different types of cryptocurrency, and each one has its own benefits and drawbacks. If you’re thinking of investing in cryptocurrency, it’s important to do your research and understand the risks involved.