Cryptocurrencies are a form of money specifically designed to take advantage of the architecture of the internet. Instead of relying on a standard financial institution to guarantee and verify transactions, cryptocurrency transactions are checked, or “confirmed,” by the computers of the users on the currency’s network. The computers that verify the transactions usually receive a small amount of currency as a reward. The process of receiving rewards in exchange for verifying transactions is called “mining,” and it is the main way that new currency is produced. Mining works differently for different currencies.
Bitcoin is the original cryptocurrency, and though it isn’t valued as high as it was in the past, it is still the most valuable cryptocurrency on the market.And recently the price of butcoin has crossed 570$ so its most valuable. Its proof-of-work verification system is resistant to fraud, but it requires significant power consumption.
BlackCoin was created in order to prove the reliability of a pure proof-of-stake verification system. It launched strong, with a polished sales pitch and integration into some real world point-of-sale systems. However, growth has stalled in recent months. BlackCoin is still only accepted by a handful of businesses worldwide, though those businesses cover areas as diverse as landscaping, shaving products and yoga classes.
Dash was introduced by creators Evan Duffield and Kyle Hagan. The currency incorporates several key innovations, some aimed towards increasing anonymity and others simply to improve the functioning of the system. Its core purpose is to act as a kind of electronic cash, providing a level of anonymity hitherto unheard of among cryptocurrencies. Evan Duffield is still actively developing Dash. Dash is not yet widely accepted by retailers, but a fair selection of independent businesses accept it. Its value per coin is also one of the highest on the market.
In years past the internet was suddenly inundated with pictures of an adorable Japanese dog covered in Comic Sans captions. This dog soon became the mascot of a new cryptocurrency, named Dogecoin in honor of its canine inspiration. Dogecoin has not gained the wide acceptance of other cryptocurrencies, but a significant number of retailers accept the currency – Dogecoin’s business directory boasts over 200 companies that accept it as a form of payment. Dogecoin also has an enthusiastic and committed user base, and holders of the currency have engaged in several charity campaigns to help establish its legitimacy.
Litecoin was first introduced by Charles Lee, a former employee of Google. Its stated purpose was to improve on other proof-of-work currencies through a few small but potent tweaks. Litecoin has fared decently since its inception, maintaining a significant portion of its value while remaining accessible to first-time investors. Because of its age and reputation, Litecoin is accepted by many independent businesses in a variety of categories including electronics, gaming, advertising, hosting and apparel. Still, because its innovations are minor and it lacks first-mover advantage, widespread acceptance has been slow.
The technology behind cryptocurrencies has many exciting applications beyond enabling financial transactions. Namecoin, one of the earliest alt coins, uses the peer-to-peer verification technology that makes cryptocurrency possible to create a decentralized DNS. Users of Namecoin can look up specially registered domain names on the network, rather than relying on a large centralized look-up server owned by a large corporation. Namecoin has almost no retailer acceptance, which isn’t a big issue, since the main financial use of Namecoin is registering domains on its network.
Nxt bills itself as a “second-generation” cryptocurrency. What this means is that Nxt – and other currencies like it – are less concerned with functioning as a standalone currency and more concerned with providing a decentralized system for online exchange. Nxt comes equipped with a toolkit for creating custom cryptocurrencies that are then secured and tracked in Nxt’s ledger. Because this currency was conceived as an online marketplace rather than strictly a form of money, Nxt itself does not have significant retailer acceptance. Most exchanges of Nxt are transacted by individuals and mediated through the software itself.
Peercoin was first conceived as an answer to growing sustainability concerns surrounding another cryptocurrency. Some specialty online retailers take payments in the currency, but these remain few and far between. With a little digging, you can exchange Peercoins for survival gear, video games, jewelry and more. Some charitable companies also accept payments in Peercoin.
One of the things that has generated the most buzz around cryptocurrencies in the tech community is their potential alternate uses. A distributed verification system is certainly a revolutionary way to manage money, but these types of networks have the potential to do much more than enable transactions. Primecoin offers one such alternate application: A cryptocurrency that, in addition to functioning as a form of money, uses the processing power of its users to conduct mathematical research. Since Primecoin is a fairly novel currency, its retail acceptance is very low, but using it could grant significant benefits to the scientific community.
Ripple is an entirely new kind of cryptocurrency. Instead of exchanging Ripple directly for goods and services, as with a traditional currency, the Ripple currency is a medium for converting any currency instantly into any other one, without relying on a central exchange. Because of this unique architecture, there are no retailers who directly accept XRP, but Ripple does have the potential to allow for more trade in many existing currencies.