Did you know that 1800 new Bitcoins are added to the market daily? As cryptocurrencies continue to rise in value, many people are looking to them as a sound investment. However, you need to know what lies beyond Bitcoin to get the most for your money.
From Bitcoin Cash to Cardano, we can help. Read on as we give the top types of cryptocurrency other than Bitcoin.
Ethereum is arguably the biggest and most important cryptocurrency after Bitcoin. In fact, many people predict it will overtake Bitcoin in value very soon.
Ethereum has become one of the most well-known types of cryptocurrency as it is actually a software platform, not just a currency. It allows the creation of decentralized applications and smart contracts on its blockchain. These can exist without any fraud or control from third parties.
The currency used on this platform has the name Ether, which is often used interchangeably with Ethereum. It is relatively new, having only started up in 2015. Its original goal was to create a smart suite of financial products which people could access, regardless of nationality, creed, or culture.
However, its uses have gone far beyond what its original intent was. Everything from shipping contracts to digital pet cats gets created and traded with it.
2021 will see Ethereum make huge changes to how they operate. They plan to allow their network to run itself with less energy and more speed. They will allow people to stake their Ether on the network and build Ether as you would with interest.
Litecoin has been around longer than Ethereum, appearing on the cryptocurrency market in 2011. A former Google employee created it as a peer-to-peer currency. Functionally, it is almost identical to Bitcoin.
It is an open-source payment network that uses proof of work, just like Bitcoin. This means the process in which they are created and added to a ledger works in the same way.
However, it has a lot more coins available than Bitcoin does. At 84 million, it is almost four times the amount of Bitcoin itself. Also, the transaction time is much quicker with Litecoin.
The biggest difference between them is the algorithms used. Litecoin uses a new algorithm known as Scrypt. This is different from Bitcoin’s SHA-256 algorithm. This only impacts when the currency is mined and Bitcoin’s algorithm is more complex.
This complexity has meant that sophisticated hardware is now required to mine Bitcoin. For the average person, it becomes too expensive a process to consider.
That is not the case with Litecoin, which can be mined using readily available hardware. You can find out more about Litecoin at this link.
Bitcoin cash is a splinter currency from the Bitcoin network. It occurred in December 2017, when members of the cryptocurrency community disagreed with Bitcoin’s plans for changes to the software. This was one of the first results of a hard fork.
As the cryptocurrency market works on decentralization, changes to what makes it run must have consensus. If no agreement is met, the currency splits, creating two different cryptocurrencies.
That is what happened with Bitcoin Cash. At first, many currency exchanges refused to acknowledge or trade it.
The result of this splinter was that Bitcoin cash could hold more transactions due to an increase in block size. Transactions were also made much faster by the change.
Cardano was created by one of the founding members of Ethereum. Its inception included consultation between engineers, mathematicians, and cryptography specialists.
Like Ethereum, it is more than just a currency but a platform for decentralized apps. It aimed to provide broad-scale use of financial transactions.
Due to its constant research and trusted team, it has developed a sound reputation. While it is still in its infancy, its blockchain is supposedly more able than that of Ethereum. It aims to provide solutions for voter fraud and contract tracing, among numerous other applications.
Ripple is one of the well-known types of cryptocurrency that has recently started to make a reputation for itself. It aims to make financial transactions simpler across borders. It does this by lowering conversion rates and creating real-time currency exchange rates.
Just like the currency of Ethereum is Ether, the currency of Ripple is XRP. However, instead of using a blockchain, it uses a protocol and digital payment network. It works in a very similar way to SWIFT, which can transfer money internationally between banks.
Unlike the mining concept, used to create other different cryptocurrencies, Ripple validates transactions through a server network. A poll is conducted on a consensus mechanism regarding the transaction’s authenticity, meaning XRP transactions are extremely fast.
Ripples’ popularity is increasing, mainly because of its practical applications for banks. It has its own consortium named Ripplenet. This is set in 40 different countries and includes 200 financial institutions.
Its appeal is that it allows fees that are much cheaper than Bitcoin. Also, transactions are almost instantaneous. Compare this to the old methods in which intermediaries could take days and be expensive to do the same job.
Other Types of Cryptocurrency
There are numerous other types of cryptocurrency on the market, each of which could be the next investment opportunity. Keep watch on the markets and remember that any investment does pose a risk, though the volatility of cryptocurrencies can prove more so than others.
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