Welcome to the exciting (and sometimes confusing) world of virtual currency. Alternative cryptocurrencies, like Bitcoin, have revolutionized the way we think about money ever since Bitcoin lead the way for the first wave of cryptocurrencies.
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At one point, Bitcoin was the only cryptocurrency around, and now, there are thousands. Bitcoin has become the leader that other altcoins follow and remains the most widely accepted virtual currency to date. Whether you are a financial wizard or average person, anyone can join the cryptocurrency game.
The key to understanding and exceling at cryptocurrency is knowledge. Each of the following cryptocurrencies attempt to improve on existing technological solutions. Cryptocurrencies can fulfill many functions, and they aim to work on issues ranging from storing medical data to providing anonymous financial transactions. Many provide a decentralized network allowing efficient anonymous transactions, and in addition, there are Virtual Private Networks (VPNs) that can help ensure security.
What are Cryptocurrencies?
A cryptocurrency is a form of digital currency that comes as a “coin” or “token”. They are largely intangible and were originally designed to be free of a central regulatory authority, like a bank or government agency. At first, it was criticized by the traditional finance industry, but now many are embracing blockchain technology.
Cryptography uses mathematical equations to ensure that the tokens are securely created, stored, and transferred. Anonymity and decentralization are the key components to most cryptocurrencies, and this is why the cryptocurrency world continues to grow in popularity.
Types of Altcoins:
Bcash (BCH)
Bcash originated out of an early hard fork of bitcoin. A fork is when developers and miners of a cryptocurrency disagree on the cryptocurrency’s mining and transaction process, and when this occurs, the currency “splits”. Some developers and investors will choose to follow the original code while others will support the currency’s new “update”. As a result of such a fork, Bcash launched in 2017.
BCH was created to increase the scalability of Bitcoin from one megabyte to eight megabytes which allows for larger transactions. It also removed the Segregated Witness protocol that is used in Bitcoin, which limited the block space available for transactions.
Ethereum (ETH)
Founded in 2015, Ethereum is one of the giants that followed Bitcoin. Ethereum is a decentralized platform that allows you to execute smart contracts and build applications, and you can essentially build other cryptocurrencies off the Ethereum platform. Its token is known as ether, and ether is used by other developers to run their own applications or as a token to buy other cryptocurrencies.
In 2014, Ethereum had its first official presale. This was essentially the first initial coin offering (ICO), and these are now a popular source of funding within the industry. After 2016, Ethereum was split into Ethereum (ETH) and Ethereum Classic (ETC), and it is still one of the most valuable coins on the crypto-market space.
Zcash (ZEC)
Launched in 2016, Zcash is based on a decentralized and open-sourced platform. Zcash prides itself on its ability to ensure privacy and transparency during each of its transactions, and it claims it is the “https” of the crypto world. Essentially, it is added privacy to already pre-existing crypto-transactions.
They even offer an added feature of “shielded” transactions, which allow for further crypto-security. Zcash developers came up with an innovation called zk-SNARK, and this revolutionized the way cryptography is used to secure crypto transactions.
Dash (DASH)
Dash is a more private form of bitcoin and comes with features like DarkSend and InstantX that provide added support to protect anonymous transactions. It was originally known as Darkcoin and was renamed Dash in 2015.
Dash allows you to make nearly untraceable transactions. It offers stronger anonymity than most cryptocurrencies and is based on a decentralized network. Founded in 2014, it was founded by Evan Duffield and quickly gained popularity among crypto-enthusiasts and investors. It differs from other coins in that it can be mined with either a GPU or CPU.
Ripple (XRP)
Founded in 2012, Ripple aims to work as a global network of low-cost payment transactions. XRP works to allow banks and individuals to make international payments at low costs while ensuring a high level of transparency. You cannot mine ripple which helps reduces latency issues.
It also decreases the need for high computing strength that some other coins need for mining. Many popular banks have already adapted Ripple technology for cross-border payments because it is the most popular cryptocurrency for traditional investors. Traditional investors understand ripple’s utility as an efficient method of cross-border transactions.
Neo (NEO)
Originally known as Antshares, Neo was founded in 2014. Called the “Chinese Ethereum”, it is the largest Chinese cryptocurrency. It utilizes smart contracts in a similar way to ETH. Neo owes much of its success to its ability to support multiple programming languages on its platform.
EOS (EOS)
Launched in June 2018, EOS is one of the newer currencies, and it was created by a well-known mind in the blockchain world, Dan Larimer. Before starting EOS, Larimer started and popularized Steemit which is a popular social media site that was founded on blockchain technology.
EOS is founded on the same platform as Ethereum. During their ICO, EOS was able to generate close to $4 billion in funding, which is one of the highest recorded. Its proof-of-stake system aims to provide more scalability than other currencies. Also, EOS differs in that there is no mining. To replace the need for miners, block producers are rewarded in tokens depending on their rate of production.
Cardano (ADA)
In 2017, Cardano was founded by a co-founder of Ethereum. Carles Hoskinson hoped to combine the benefits of Ethereum as well as fulfill several other functions. ADA looks to solve the issues that come with other digital tokens by focusing on interoperability. They also hope to solve problems of scale. ADA has the ability to make financial transactions in mere seconds, when before it could take days, and this is an added benefit to those in the cryptocurrency industry.
Monero (XMR)
Designed to be an anonymous currency, XMR is focused on security and privacy. It was one of the older altcoins to become fully established after being founded in 2014. Unlike other virtual currencies, monero’s funding is completely dependent on grassroots community funding. XMR utilizes a rather unique technique known as “ring signatures”.
With ring signatures, transactions using XMR have added anonymity. A group of cryptographic signatures will appear with each transaction, but only one of which is the “real” one. They all seem as if they were completely valid, which provides more security, and for people seeking private transactions, this is a draw to use the form of XMR for cryptocurrency.
Litecoin (LTC)
One of the more well-known altcoins, Litecoin has been around since its founding in 2011. Its founder, Charlie Lee, formerly worked as a Google engineer and is a well-respected figure in the blockchain-sphere. LTC is open-source and utilizes scrypt as proof-of-work.
Litecoin is very similar to Bitcoin but works much faster, and it can generate blocks quicker and can confirm transactions at a higher rate. Litecoin has been adopted and endorsed by banking companies around the world because of the benefits it offers to users.
Original Blog Post Link: https://torguard.net/blog/a-cryptocurrency-beginners-guide-to-altcoins/
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