Cryptocurrencies are a relatively recent product and phenomenon that replaces physical money (and it’s intrinsic value) or products like gold (that have markets behind them) with an asset that’s entirely digital and thus exists only on a computer. Cryptocurrencies use cryptography to secure transactions across a medium of exchange and the people behind them typically control the creation of new units (with most new units being created as part of their original code, needing to be mined by other computers and users (mostly both)). Cryptocurrencies also help with the transfer of assets online, which is happening on an increasing basis considering most money exists on computers anyway (with that money being a virtual currency, which is still tied to actual fiat or physical money).
With Bitcoin crossing the $15,000 per coin threshold this week, many people who invested only $100 dollars back in 2010 are millionaires. That sort of unprecedented growth is bringing even more money into the cryptocurrency market with many people looking for the “next Bitcoin” out there that could change their lives forever in a couple of years. So, with that in mind, we wanted to break down the top 15 cryptocurrencies out there in the hopes that at least some of you will bet on the right coin and then make the author of this article filthy rich for pointing you in the right direction! So, let’s get right into it!
EOS is the first Ethereum clone/competitor on this list as well as the first entry in the list, period. As you will see, every cryptocurrency on this list has its own niche and because most of those niches have been filled by now, new coins have to simply offer a variation on an existing coin to gain a following. EOS does this by implementing a delegated proof of stake system, which allows users to basically give their voting right to someone else in exchange for a decreased transaction verification time and also to make the network run more efficiently as a whole. Because these coins are decentralized (meaning they have no CEO or board making decisions for the group like a bank would), people essentially vote for changes to the system (which can lead to a soft or hard fork, which is a change significant enough to offer two separate coins moving forward) and while people with more coins have more power, being able to acquire voting cache this way is an interesting concept that’s sure to rile up some who think it will end to the end of decentralization.
While every crypto, NEM is unique. NEM, which stands for New Economy Movement, is rare because of its algorithm which is called PoI or Proof of Importance. Like other coins, NEM requires miners in order for new supply to be created and unlike PoW (which requires hefty processing power) and PoS (which requires a toilet? Or rather which requires users to have coins to get coins), PoI focuses on users spending their coins. Considering the fact that most coins have a ton of people simply holding onto them (or HODLing, rather) (as the price over time seems to do nothing but go up so why would you spend them, without some sort of incentive) NEM attempts to overcome that by doing just that and incentivizing purchases which has lead to an economy where people are spending coins as quickly as possible in order to receive more.
Each crypto-currency essentially fills a pretty specific role in the economy and Monero is no different even if it’s one of the more broad-based cryptos in that is a private transaction capable cryptocurrency, which basically means that it’d handle day to day transactions like clothes or grocery shopping. While there are quite a few coins for this purpose (like Bitcoin itself) few have the active membership bases that Monero does. It’s thought to be that active bases because it’s both open and focused on privacy, basically, the two most important things an online community and especially a cryptocurrency should have. It’s actually considered to be the most privacy-focused crypto-currencies which are really one of the main things that crypto’s offered when they first appeared. The ability to buy things online anonymously was the main role of bitcoins in the beginning, as the main currency for sites like Silkroad that really only existed on the Dark Web. Because of that past, a lot of people still look on crypto’s suspiciously, so it’s nice to see a coin stick to that original tenet even if it may mean some weird looks on the street… By other institutions?
11. Ethereum Classic
Ethereum Classic is the original version of Ethereum, with the Ethereum that’s lower on this list being the result of a fork that occurred a while back. That split happened when a decentralized autonomous organization (DAO) that was built on top of the original Ethereum (pre-fork) was hacked. That DAO was essentially a venture capital fund based on future distributed applications and was hacked by one person who took advantage of a loophole in the code that allowed him (or her, let’s be honest it’s a him) to essentially siphon off a third of the over $150 million dollars that the DAO had at the time. The response to that was the hard fork that created both versions of Ethereum and also basically made it so the hacker wouldn’t be able to access the funds that he had acquired. But because not everyone switched over to the new version (because it looked a lot like the bailout that people were using products like Ethereum to protest, basically) not everyone signed up for the new version of Ethereum and thus Ethereum Classic was born!
10. Stellar Lumens’ XLM
Stellar Lumens’ XLM is similar to Ripple’s XRP in that it is attempting to become the cryptocurrency (or blockchain technology, or both) used by the banking system itself. Most cryptocurrencies actually aim to replace most banks and that philosophy, especially after the financial collapse of 2008, appeals to a lot of people with libertarian mindsets. So, while they sound incredibly promising and seem to be signing up a lot of legitimate clients as well, the prices for things like XLM and XRP seem to lag behind the rest of the industry for working with the enemy. XLm could also end up as a bridge between crypto-currencies, or host other so-called “anchors” on their Stellar Network (which is the blockchain whereas Lumens or XLM is the currency on that network).
Bitcoin was initially created, or at least became of value, because it allowed people to make anonymous purchases online which came in handy when someone wanted to buy things on the Dark Web (like drugs, guns or (horribly) people). To really calm banks and a lot of the money that has pushed Bitcoin to the price it’s at today, Bitcoin sort of shook a lot of the privacy behind it so it no longer looked like the slave trading and money laundering coin de jour. Enter Dash, which while striving to fill that gap has ended up with hundreds of millions to billions of dollars behind it anyway. Dash also lives up to its name by offering faster transactions than Bitcoin through its InstantSend technology. While we’re still in the infancy of the whole cryptomarket, it’ll be interesting to see if coins like Dash end up killing Bitcoin by splitting it up essentially doing smaller versions of what Bitcoin can do, better than it. If so, look at Dash as one of the main culprits (hopefully from an investor’s point of view, as well).
Built by a team of technology-focused academics and developers from academia, Cardano sought to innovate an already new an innovative industry. Written in the coding language known as Haskell, which is known as a “memory safe” coding language, Cardano theoretically should have a lot fewer problems and bugs than it’s competition. Cardano’s PoS system (Meaning Proof of Stake) has been personally (and formerly) verified parts of the Cardano network which means that it’s a lot safer than the other coins on this list. It’s also found a pretty great way to balance the whole privacy/regulator problem by using a multi-layer architecture, which means that people who flock to crypto-currencies because of the privacy behind them can rest assured that the regulators that’ll inevitably flood the crypto market won’t be able to access their identity. That could literally make or break most coins so keep an eye out for Cardano in the future.
Iota had a huge push this week to overtake Ripple on the list of top coins by market cap. A coin that targets the Internet of Things (IoT), Iota is unique in that it doesn’t utilize a blockchain in order to lower the computational needs of the network it’s being utilized as or for. On top of that, it would eliminate the transaction fees associated with that work, which is part of what makes it so attractive to its target market. Its breakthrough technology is called Tangle, which removes dedicated miners who are typically needed to verify transactions on most every other cryptocurrency by having the sender in a transaction do the proof of work that approves two transactions. Long story short it further decentralizes the internet of things by making every user a node in the network and from a philosophical standpoint that’s something that people involved in cryptocurrencies really buy into and that could explain it’s rapid rise this year and especially this week where it reached $5 per coin. It also becomes faster the larger it gets which is the opposite of what most coins do.
6. Bitcoin Cash
Bitcoin Cash is the result of another fork in the blockchain technology behind Bitcoin. Bitcoin Cash was a hard fork just like Bitcoin Gold, both of which were responses to the scalability problem that Bitcoin seemingly had/has which was mainly based on the fact that their blockchain was limited to one megabyte in size, which limits the number of transactions per second. As compared to Visa, which could handle almost 50,000 transactions per second, Bitcoin could handle around seven, which essentially created a bottleneck that increased the amounts for fees as well as the delayed processing of a transaction that didn’t fit into a block. That issue created what was called an “Ideological battle over bitcoin’s future” and Bitcoin Cash was one of the answers to that. Called (at the time) Bitcoin Improvement Proposal 91 (or BIP91) and while some thought that they were essentially kicking the can down the road by not addressing the scalability problem (while also seemingly favoring those who wanted to treat Bitcoin as a digital investment as opposed to a transactional currency). It officially started trading as its own block on July 23rd, 2017 and it adopted it’s named thanks to those behind the Chinese mining pool via BTC.
5. Bitcoin Gold
Like Bitcoin Cash, Bitcoin Gold was a hard fork that occurred a few months after Bitcoin Cash (October of this year as opposed to late July of this year for Bitcoin Cash). Despite the relatively recent adaptation of Bitcoin Gold, it’s already the 8th largest crypto-currency by market cap (after debuting as the fifth largest). Bitcoin Gold is primarily aimed at decentralizing Bitcoin mining as a response to mining’s move from CPUs to GPUs then to the ASIC chips that most computers don’t have (which means that most mining has been concentrated to a few large mining operators who can afford to buy computers with ASIC chips). Because that gives a small few tremendous power in terms of voting for new features, Bitcoin Gold attempts to decentralize their power by implementing new safety features like replay protection and unique address format(s).
Because of Bitcoin’s dominance, especially early on in the crypto game) other coins have positioned themselves as not so much a replacement or competitor but more of a “Me Too!” to Bitcoin. As you’ve seen in addition to Bitcoin there is Bitcoin Gold and Bitcoin Cash and Litecoin has been positioned as the Silver to Bitcoin Gold’s… Gold. Like Bitcoin, people can mine Litecoin and it’s also open source as well. The main differences between the two lie in the way transactions go down, namely in the volume of transactions that Litecoin can handle because of it’s faster block generation. However, there is a downside to this as well as the disadvantage that comes with the higher volume of blocks will lead to more orphaned blocks. Whether or not the transaction and the confirmation speed that Litecoin can boast is a relevant selling point remains to be seen but both are considered moot points by Bitcoin’s adherents. However, considering the volatility that exists in a lot of the crypto markets currently, you’d think that the quicker the transaction time the less risk involved.
3. Ripple (XRP)
Most crypto-currencies are decentralized, meaning that no single entity (like a bank) has the ability to make decisions or change the pricing. That makes a lot of sense as cryptos were launched really as the response to the financial meltdown that occurred in 2007-2008 and as a way to really revolutionalize the international banking system. XRP, which is the coin created by the company Ripple, is actually a centralized system that is attempting to also revolutionalize the banking system but is doing it from the inside. While it’s price is relatively low (especially when compared to other coins on this list) at around 25 cents per XRP, the goal(s) of Ripple is to change the way that banks and people send money internationally. Typically money is sent between countries through a system called SWIFT, which takes 2-3 business days and costs a pretty penny. Ripple’s system takes 10 SECONDS and costs a fraction of that pretty penny, which is obviously very attractive to the banks that do thousands of transactions a day. XRP is also deflationary, meaning that the coins that exist now are the coins that’ll exist forever, so when you add that to the fact that a small % of coins are destroyed with each transaction and that banks are already signing up for trials with Ripple’s technology and it’s easy to see why Ripple is thought to have one of the brightest futures on this list (as it has a real-world use!). Considering the fact that the banks are basically in charge of a lot of the governments of the world, the coin that works with the banks and regulations as a whole has the best chance to not only survive but thrive and that’s the argument that has a lot of people (and early adopters of XP) excited for the next ten years.
Outside of Bitcoin, Ethereum is the King of cryptocurrencies. Launched in July of 2015 after a crowdfunded campaign that lasted three months (from July to August of 2014), the main crux of Ethereum is that it’s a programmable blockchain that is also “Turing-complete”. Turing is in reference to Alan Turing, who is considered the father of computing and was played by Benedict Cumberbatch in the film The Imitation Game. Something is said to be Turing complete if it can be used to simulate a Turing machine, so in this case, Ethereum is a programmable blockchain language that can essentially solve any reasonable computational problem. While that may not mean a whole lot to the average investor it clearly means a lot to the people in the know, and those people dictated that Ethereum should be the runner-up to Bitcoin and because of that the price has soared in 2017. In January of this year the price of one Ethereum coin was around $9.30 (depending on which marketplace you were looking) and as of the writing of this article, it’s at over $458.35. That means that if you had purchased $1,000 worth of Ethereum in January, you’d have nearly $50,000!
And then there’s the King…
Bitcoin was launched in 2009 and has been attributed to Satoshi Nakamoto and is the crypto to Bitcoin Core’s reference client. Every coin is based on Bitcoin and all of its users hope that it’ll end up growing like Bitcoin as well. While it was initially known as a way to pay for things online anonymously (which was preferential on Dark Web sites like SilkRoad, it was actually set up as a libertarian response to central banking and really the financial crisis of 2008 that almost ended the economies of the Western world (and really the world itself). A decentralized system, Bitcoin essentially aims to replace banking as a whole by bringing the power back to the people in the banks as opposed to it being the other way around. While it’s different from the other coins on this list in terms of how it functions and why it functions, it’s more important to talk about the amazing value that Bitcoin has provided to its investors. Peaking at over $16,000 this week, people who invested only $10 when the coin was trading at between 1 and 3 cents would be millionaires as of the reading of this article. That’s amazing and all of the future millionaires who are reading this article can thank Bitcoin for that… and hopefully, share it with the author of this piece!