This often raises the question: how do I choose which cryptocurrency to invest in – are they not all the same?
Undoubtedly, bitcoin has captured the lion’s share of the cryptocurrency (CC) market, and this is largely due to its FAME. This phenomenon is similar to what is happening in national politics around the world, where a candidate is gaining a majority of votes based on FAME rather than any proven ability and qualifications to run a nation. Bitcoin is a pioneer in this market space and continues to collect almost all the headlines in the market. This FAME doesn’t mean it’s perfect for work, and it’s pretty well known that bitcoin has limitations and problems that need to be addressed, however in the world of bitcoins there is disagreement about how best to solve the problems. As problems arise, developers have a constant opportunity to initiate new coins that solve certain situations, and thus distinguish themselves from the approximately 1,300 other coins in this market space. Let’s take a look at two Bitcoin competitors and find out how they differ from Bitcoin and from each other:
Ethereum (ETH) – The Ethereum coin is known as ETHER. The main difference from bitcoins is that Ethereum uses “smart contracts” that are objects for an account in the Ethereum blockchain. Smart contracts are defined by their creators, and they can interact with other contracts, make decisions, store data, and send ETHER to others. The performance and services they offer are provided by the Ethereum network, and all of this is above what bitcoin or any other blockchain network can do. Smart contracts can act as your stand-alone agent, following your currency spending instructions and rules and initiating other transactions on the Ethereum network.
Ripple (XRP) – This coin and Ripple network also have unique features that make it much more than just a digital currency such as bitcoin. Ripple has developed the Ripple Transaction Protocol (RTXP), a powerful financial tool that allows exchanges in the Ripple network to transfer funds quickly and efficiently. The main idea is to place money in “gateways”, where only those who know the password can unlock the funds. For financial institutions, this opens up huge opportunities as it simplifies cross-border payments, reduces costs and provides transparency and security. All this is done with creative and clever use of blockchain technology.
The mainstream media covers the market with fresh news almost every day, but there is little depth in their stories … mostly just dramatic headlines.
The Wild West show continues …
5 crypto shares / blockchain choices on average 109% are 11/17 December. Wild swings continue daily. Yesterday we had the last attempt to bring down the cryptocurrency boom in South Korea and China.
On Thursday, South Korean Justice Minister Park Sang-ki sent global prices for bitcoin temporarily falling and virtual coin markets when regulators reportedly were preparing legislation to ban cryptocurrency trading. Later that day, South Korea’s Ministry of Strategy and Finance, one of the main agencies of the South Korean government’s special group for regulating cryptocurrencies, came out and reported that their office disagree with a premature statement by the Ministry of Justice on a potential ban on cryptocurrency trading.
While the South Korean government says cryptocurrency trading is nothing more than gambling, and they are worried that the industry will leave many citizens in a poor home, their real problem is the loss of tax revenue. This is the same problem that worries every government.
China has grown into one of the world’s largest sources of cryptocurrency mining, but now, according to rumors, the government is regulating the electricity used by mining computers. More than 80% of electricity for bitcoin mining today comes from China. By closing the miner, the government will worsen bitcoin transaction verification users. Mining will be relocated, but China is particularly attractive due to very low electricity and land costs. If China complies with this threat, there will be a temporary loss of mining capacity, which will cause Bitcoin users to see longer timers and increase transaction verification costs.
This wild journey will continue, and like the boom online, we will see big winners and, ultimately, big losers. Also, like the online boom, or the uranium storm, those who come earlier will thrive, while massive investors always show up at the end, buying upstairs.