A quick glance into the Top 100 on CoinMarketCap can inspire many questions. Why are there so many different cryptocurrencies? What do they all do? Which ones are important?
In this article I attempt to highlight the main differences between altcoins, in order of their current market capitalizations. I have excluded Bitcoin and Ether for this article. All coins below have at least $500 million in market cap (as of May 2017).
Ripple is a cryptocurrency aimed towards working with banks, specifically with the purpose of creating low-fee, immediate, cross-border transactions. Current payment systems tend to be proprietary to each bank, only allowing inner-bank transactions (if you’re lucky). Ripple would allow any bank using its technology to seamlessly transfer funds to any other bank, regardless of currency type (including Bitcoin) or geography.
Ripple tends to be quicker than Bitcoin on reaching consensus, which is a must-have considering its use cases. Ripple currently has some big name clients, including Bank of America, BMO, and UBS. Keep it in mind, as it’s definitely an altcoin to look for in the future.
To clarify, NEM is the network for which the currency XEM exists on.
As some analysts have put it: Bitcoin is to a pager as NEM is to an iPhone, meaning the functionality and technological advancements in NEM are much greater than those of Bitcoin. While Bitcoin stores information on who owns which Bitcoins, NEM allows businesses and individuals to securely hold information at large. Effectively, any file you could store on a computer, can also be securely placed on the NEM network. This ensures the data is not tampered with and has 100% uptime.
NEM prides itself in being developed from completely new code, unlike many coins which fork from existing codebases. NEM is similar to Ethereum in the sense that it’s attempting to be a generalizable blockchain.
If you are familiar with the story of the DAO (Decentralized Autonomous Organization) developed by Slock.it in early 2016, you are most likely familiar with ETC. Essentially, there was a substantial hack, which compromised many users’ Ether in June 2016. As a result, the community decided to fork off of the existing blockchain, to give users back their Ether – this network is what we currently know as the Ethereum network. The ‘abandoned’ blockchain continued to be mined, and has since made a dramatic recovery. The unchanged network is what we now know as Ethereum Classic.
ETC takes the approach of immutability – no matter what catastrophic events occur, code remains law. This can be extremely appealing, in the sense that users don’t have to worry about the developers ever making drastic changes (for better or worse). Other than this, Ethereum Classic is very similar to Ethereum.
Litecoin is a fairly old cryptocurrency – one of the first to develop after Bitcoin caught traction. It started in October 2011, and has since grown considerably. Litecoin is very similar to Bitcoin, in the sense that it acts solely as a currency, unlike Ethereum and NEM. Litecoin has different technical specifications than bitcoin: the hashing algorithm, the time between blocks, the amount to be in circulation and more. This makes transaction times faster, particularly because of Litecoin’s successful SegWit implementation.
Dash, a name inspired by Digital Cash, is exactly how the name sounds. Like Bitcoin and Litecoin, its primary function is replace traditional currencies. Dash, formerly known as DarkCoin, takes pride in being fully anonymous, so that transactions cannot be tracked. This is appealing to many users for several reasons, but can often be seen as a perpetuator of illegal online purchasing.
Dash also tends to be more agile; it has a voting system in place, allowing for changes to be voted on and made in shorter time frames. Dash governs itself by allocating resources appropriately. For example, 10% of Dash is kept in a treasury to help pay the development team – a novel idea that keeps autonomy intact.
Just like Dash, Monero is centered around anonymity, often favoring privacy over marketing and usability. Monero is another altcoin strictly to be used as a form of currency. Dash has actually attempted to copy some of the privacy functionality within Monero, and received criticism when not following up. Monero is typically viewed as the safest alternative to Bitcoin in terms of privacy.
Please feel free to comment if you have any questions 🙂