When it comes to cryptocurrencies, Bitcoin is often the first that comes to mind. It was the first decentralized digital currency, after all.
But there are other digital currencies out there that could one day overtake Bitcoin. Here’s a look at three of them.
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third party interference. These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent ownership of property.
This enables developers to 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 middle man or counterparty risk.
The Ethereum project was crowdfunded in 2014 with ETH (the native currency of Ethereum) raising over $18 million dollars. The Ethereum Foundation, a non-profit organization, was created to manage the development of Ethereum. The foundation set out with three primary goals:
To support and develop the Ethereum protocol To promote and support research and development of next-generation blockchain technologies To support and foster a vibrant Ethereum ecosystem including developer tools, wallets and applications
Since then, Ethereum has grown to become the second largest cryptocurrency by market capitalization with a value of over $66 billion dollars as of January 2018. It’s also worth noting that ETH isn’t just used as a currency but also as “gas” (or fuel) to power the Ethereum network and its many applications.
Ripple is both a cryptocurrency (XRP) and an open payment network within which that currency is transferred. It is often described as the “world’s only enterprise blockchain solution for global payments” because it allows for financial institutions to directly transact with one another without going through slow and expensive intermediaries like correspondent banks or clearing houses.
This makes it possible to move money quickly and cheaply around the world.
The Ripple network has been operational since 2012 but it didn’t really start gaining traction until last year when several major banks announced they were testing out its technology for international payments. Some of these banks include Santander, American Express, UBS and Credit Agricole.
If these tests are successful then we could see widespread adoption of Ripple’s technology by financial institutions which would likely lead to an increase in the price of XRP.
Bitcoin Cash (BCH) is a fork of Bitcoin that was created in August 2017. The fork was necessary because Bitcoin was becoming increasingly slow and expensive to use due to its scalability problem.
Bitcoin Cash addressed this problem by increasing the block size from 1 MB to 8 MB which allows for more transactions to be processed per block. This has resulted in faster transaction times and lower fees for users on the Bitcoin Cash network.
Due to its improvements over Bitcoin, Bitcoin Cash has grown to become one of the largest cryptocurrencies by market capitalization with a value of over $30 billion dollars as of January 2018. It currently sits in fourth place behind Bitcoin, Ethereum and Ripple but it could potentially overtake them all if its momentum continues.
Only time will tell.