Here’s a question that often comes up: How do I choose which cryptocurrency to invest in – aren’t they all the same?
There is no doubt that Bitcoin has captured the lion’s share of the cryptocurrency (CC) market and this is mainly because of its FAME. This phenomenon is very similar to what is happening in national politics worldwide, where a candidate wins the majority of votes on the basis of FAME rather than any proven competence or competence to rule a nation. Bitcoin is the pioneer in this market space and continues to grab almost all the market titles. This FAME doesn’t mean it’s perfect for the job, and it’s fairly well known that Bitcoin has limitations and issues that need to be addressed, however, there is disagreement in the Bitcoin world about how to address the issues. As the problem continues to grow, there is continued opportunity for developers to launch new coins that address specific situations, and thus differentiate themselves from the approximately 1300 other coins in this market space. Let’s look at two Bitcoin competitors and explore how they differ from Bitcoin and each other:
Ethereum (ETH) – Ethereum currency is known as ETHER. The main difference from Bitcoin is that Ethereum uses “smart contracts” which are account holding objects on the Ethereum blockchain. Smart contracts are defined by their creators and can communicate with other contracts, make decisions, store data and send ETHER to others. The execution and services they offer are provided by the Ethereum network, all of which are beyond what Bitcoin or any other blockchain network can do. Smart contracts can act as your autonomous agents, following your instructions and rules for spending coins and initiating other transactions on the Ethereum network.
Ripple (XRP) – This currency and the Ripple network have unique features that make it far superior to digital currencies like Bitcoin. Ripple has developed the Ripple Transaction Protocol (RTXP), a powerful financial tool that allows exchanges on the Ripple network to transfer funds quickly and efficiently. The basic idea is to keep money in a “gateway” where only those who know the password can unlock the funds. This opens up huge potential for financial institutions, as it facilitates cross-border payments, reduces costs and provides transparency and security. This is done through creative and intelligent use of blockchain technology.
Mainstream media is covering this market almost daily with breaking news, but their stories lack depth… they are mostly dramatic headlines.
The Wild West show continues…
5 Stocks Crypto/Blockchain Pick Averages Up 109% From Dec 11/17. Wild swings continue with daily motion. Yesterday we saw South Korea and China make the latest attempt to dampen the cryptocurrency boom.
On Thursday, South Korea’s justice minister, Park Sang-ki, sent global bitcoin prices temporarily lower and virtual currency markets into turmoil when he said regulators were preparing legislation to ban cryptocurrency trading. Later the same day, South Korea’s Ministry of Strategy and Finance, one of the main member agencies of the South Korean government’s cryptocurrency regulation task force, came out saying that their department do not agree Including the Ministry of Justice’s premature statement about a possible cryptocurrency trading ban.
Although the South Korean government says cryptocurrency trading is nothing more than gambling, and they worry that the industry will leave many citizens in the poor house, their real concern is the loss of tax revenue. This is the same concern of every government.
China has become one of the world’s largest sources of cryptocurrency mining, but now the government is rumored to be looking into regulating the electrical power used by mining computers. Currently over 80% of Bitcoin mining electricity comes from China. By shutting down miners, the government will make it harder for Bitcoin users to verify their transactions. Mining jobs will move elsewhere, but China is particularly attractive because of very low electricity and land costs. If China follows through on this threat, there will be a temporary loss of mining capacity, causing Bitcoin users to see longer timers and higher costs for transaction verification.
This wild ride will continue, and much like the Internet boom, we will see some big winners and, ultimately, some big losers. Also, like the Internet boom, or the uranium boom, early adopters prosper, while mass investors always show up at the end, buying at the top.