What is the Different Between Cryptocurrencies?

There are Different Cryptocurrencies such as Bitcoin, Ethereum, Litecoin, etc.

Bitcoin is by far the most popular cryptocurrency yet there is growing interest in other alternative currencies. Ethereum, Litecoin and Ripple are a couple examples of cryptocurrencies on the rise. If you are a bit confused as to what the difference is between cryptocurrencies, you are not alone. Most people are unsure as to what distinguishes Bitcoin from Ethereum, Ethereum from Litecoin and so on. Our precious metals and cryptocurrency experts are here to clarify the differences to help you understand each of these unique cryptocurrencies and make a prudent investment.

Bitcoin

Bitcoin has been around for nearly an entire decade yet it did not reach a mainstream tipping point until a few years ago. With a market cap in excess of $275 million, Bitcoin has emerged as the premier cryptocurrency. Bitcoin was originally invented as a peer-to-peer form of electronic cash that permits online payments to be transmitted from one person to the next without the oversight, fees and regulation of a financial institution. Bitcoin operates on the blockchain, an impenetrable digital ledger that lists activity that cannot be accessed by others. Bitcoin is completely decentralized, meaning it is not dependent on the government or central banks. Rather, “miners” keep Bitcoin going with powerful computers that work in unison to verify the legitimacy of transactions and produce additional Bitcoins.

Ethereum

Ethereum is the blockchain company that has formed the digital token known as ether. Ether and Ethereum are now used as interchangeable terms in reference to the cryptocurrency. Ethereum has a market cap in excess of $71 billion, making it one of the more popular cryptocurrencies. The blockchain backs ether just like Bitcoin yet the tech is a bit different as it is targeted for use in smart contracts. Smart contracts are revered for the fact that they do not mandate each party possess a paper contract. Rather, smart contracts are detailed by way of code in the blockchain. As soon as the contract terms are met by the pertinent parties, the deal will be executed. Ethereum’s blockchain has become so popular that it is now being experimented with by some major organizations. As an example, companies like JPMorgan and Microsoft are engaging in the consortium known as the Enterprise Ethereum Alliance to develop uses for the blockchain. Ethereum ether is mandated by developers looking to build apps for use on the Ethereum blockchain as well as users who desire access to smart contracts.

Bitcoin Cash

With a market cap of $33 billion and a 200 percent rise since its creation last summer, Bitcoin Cash (BCH) has emerged as quite the intriguing off-shoot from Bitcoin. When Bitcoin split in the “hard fork” process, those who purchased Bitcoin at the time were provided with Bitcoin cash tokens at no charge. Developer concern about high transaction times on the Bitcoin network led to the creation of Bitcoin Cash. Developers suggested increasing transaction size and speed would help yet not everybody in the community concurred with the proposal, forcing the split. Bitcoin Cash times are now faster than those provided by the original Bitcoin.

Ripple

Ripple has soared more than 8,000 percent since debuting. The cryptocurrency now has a market cap of $21.8 billion. Ripple’s appeal lies in the fact that it is a payment solution that transcends borders. Large financial institutions are flocking to Ripple, partially because it is based on the uber-secure blockchain technology. Ripple solves the problem of costly and slow transactions transmitted between parties in different countries. Considerable effort and money are required to move large sums of money across borders. Ripple is working with American Express and other financial institutions to provide businesses with immediate liquidity in transactions involving a considerable amount of money. The best part is Ripple does not tack on any extra fees.

Litecoin

Litecoin is one of Bitcoin’s top rivals in regard to the use case. Litecoin’s founder, Charlie Lee, argues his cryptocurrency is superior for transmitting payments as it is more efficient than Bitcoin. Bitcoin transactions average around 400 minutes for processing while Litecoin merely takes a couple minutes. The supply of Litecoins is limited at 84 million, which is quite the large figure compared to Bitcoin’s cap of 21 million. If transaction speed is your primary concern, Litecoin is the cryptocurrency of your dreams.

MyGold is New Zealand’s Sole Bitcoin and Bullion Exchange

We make it easy to purchase Bitcoin and bullion. If you are interested in adding bullion and/or a cryptocurrency to your portfolio, MyGold is at your service. Call us at 0800 465 369 to learn more about cryptocurrencies and precious metals. You can also reach us by email at rich@mygold.co.nz.

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