Bitcoin is facing some difficulties right now, with the Chinese Central Bank releasing a statement saying it does not recognize bitcoin as a currency, right after Greenspan denounced Bitcoin as an economic bubble, practically a worthless investment.
However as the world’s most talked about digital currencies, Bitcoin has already received worldwide popularity. Besides Bitcoin, there are many digital alternatives other than bitcoin. Let’s take a look at them:
We are familiar with this first and popular digital currency.
Bitcoin is a cryptocurrency (abbreviated as BTC) is a user-autonomous, universally encrypted electronic money.
This concept was suggested by Satohi Nakamoto in 2008. Subsequently, he suggested a concept of “openness, equality, consensus, and direct involvement” as foundation, and combined with open source software and cryptography. On the peer to peer and distributed network, bitcoin was created, distributed and openly traded on the trading platforms.
The system is designed so that the peer nodes throughout the entire network are in accordance with the network file protocols. This is to ensure fairness in trading, management, distribution and other aspects of the currency. Bitcoin is safe and reliable to trade. Bitcoin is promised to be similar to e-mail as “electronic cash”. It can be stored with anyone’s approval, and there would be no inflation, the coin cannot be forged. After the payment transfer is complete, the user will lose ownership of the bitcoin to the recipient. On January 3, 2009, there were 50 bitcoin released.
Different from traditional currency, bitcoin’s operating mechanism does not rely on the central bank, government, or business creditor’s guarantee. It relies on the peer to peer network to reach a network protocol. It is decentralized, self-improved monetary system. In theory, any person, organization, or government cannot control bitcoin’s monetary aggregation, or manufacture its inflation. It’ll gradually increase in amount at predetermined rate, with the speed increased initially and then slow down, and reach the limit of 21 million bitcoins in 2140.
There are several ways to use bitcoin in electronic money transactions, service or goods purchase, or fund transfer to individuals. You can use bitcoin directly to purchase goods and services. With the increasing acceptance from individuals, organizations, businesses and companies, its exchange rate has multiplied by few thousand times in just four years. As of March 30, 2013, the market cap in U.S. dollars had achieved a total of $1 billion. While bitcoin is currently the most widely used electronic currency, other than a few countries expressly released statements on bitcoin policy, most countries have not issued legal policy and regulation about Bitcoin.
There’s a saying of “bitcoin is gold; litecoin is silver.”
Litecoin ( symbol : Ł; abbreviation : LTC) is a peer to peer electronic currency that is an open source software project and licensed under MIT/X11. Inspired by Bitcoin and technically has the same principle, Litecoin’s creation is based on an open source encryption protocol, not subject to any central agency’s management. Litecoin’s goal is to improve Bitcoin’s design, rather to compete, and it has three significant differences.
First, Litecoin network handles a block in every 2.5 minutes (rather than bitcoin’s 10 minutes), and it provides faster transaction confirmation. Second, Litecoin’s total number is 84 million, which is roughly four times than bitcoin. Third, litecoin’s algorithm has utilized an encryption algorithm scrypt proposed by Colin Percival, which makes it easier to mine than bitcoin. Users can easily mine litecoin on regular computers. Each litecoin can be divided into 8 decimal points.
InfiniteCoin( abbreviation: IFC) is based on peer-to-peer technology. Inspired by bitcoin, InfiniteCoin have the same technical principles with bitcoin. InfiniteCoin’s creation is based on open source encryption protocol, it’s not controlled by any central agency as well, is a decentralized bitcoin alternative currency. InfiniteCoin’s goal is to improve bitcoin, and compared to bitcoin, it has significant differences: it uses Scrypt algorithm, confirms transactions every 30 seconds, has tremendous total amount of coins: around 90.6 billion. If we say BTC is gold, LTC is silver, then IFC is equivalent to copper. It’s more suitable to use in transaction rather than collection. Its digital wallet not only can be used in payments, it can also be used in mining.
4. ColossusCoin (COL)
Released on August 22, 2013, ColossusCoin is a scrypt algorithm based cryptocurrency, with total number set at 700 billion, 5 million coins in each block, and in every 25 seconds 1 block is processed. After 50,000 blocks are processed, the difficulty of mining is increased.
PPCoin (PPC) was released on August 19 2012. It’s an improvement over bitcoin’s original design. PPCoin uses proof-of-stake design, and combines the concept of “coin age”.
PPCoin does not have a fixed total amount, however it doesn’t mean PPCoin has higher inflation than Bitcoin. Bitcoin’s inflation is similar to gold, with gold’s inflation around 1-3% a year. Although we don’t know the total supply limit of gold, we can be sure that gold is a rare precious metal.
There are two types of PPCoin mining: proof-of-work and proof-of-stake. Proof-of-work mining is influenced by Moore’s Law, which depends on our mining ability. According to Moore’s law, PPCoin’s inflation will be close to gold’s after a certain period of time. And proof-of-stake mining will yield a yearly inflation of 1%. Meanwhile, PPCoin’s transaction costs will be used to counter the effect of inflation. Overall, PPCoin’s mining is still a very low inflation design, comparable to bitcoin’s design.
PPCoin’s mining reward is similar to lottery. It’s chances of winning depends on the existing amount held by users. According to its creator Sunny King, PPCoin’s design is based on the new concept of long term energy efficiency.
Namecoin’s design is based on bitcoin’s distributed domain name system. It’s basic principles are same with bitcoin. Namecoin’s first released on April 18, 2011.
Namecoin’s creation is different from bitcoin’s blockchain, it’s using a new blockchain, independent from bitcoin’s blockchain. This design is based on bitcoin, combines with the security from domain name, distributive feature, encryption, and transfer. You can mine Namecoin and Bitcoin at the same time without worrying about security issues.
The project was originally proposed by bitdns, mainly started from the dissatisfaction with current DNS flaws. You need to register a “.bit” domain name to mine Namecoin.
YBcoin is a virtual currency like Bitcoin, it was initiated from non-profit and professional programming team, and it’s a non-profit project. YBCoin has the advantages of bitcoin. It’s decentralized, non-governmental controlled, and anyone can participate in mining YBCoin. In addition it eliminates and improves bitcoin’s flaws: eliminates GPU and ASIC mining as they create inequality and slows down transaction. The mining program is much easier to use than bitcoin mining program.
YBCoin’s creators are a group of early bitcoin adopters and enthusiasts. When they realized bitcoin’s problems, they decided to invent new technologies and design a new cryptocurrency that’s more adaptable to the Chinese market. This is why the coin is name YBCoin, “Yuan Bao” means gold ingots.
YBCoin has has the following features:
It has a limited number: The whole network produces a blockchain every minute, each blockchain includes 10 YBCoins, so every year the maximum coins produced are 5.2 million coins (10*60*24*365). It’s more scarce than the number of bitcoin, and has potential for appreciation.
Open and transparent design: Its client program was released on June 29, 2013, with synced global mining. Prior YBCoin was erased, so there’s no developer team mining before regular users. The open source codes are released to the public as well.
Shorter confirmation time: It only takes 6 minutes, which means 6 blockchains to confirm a transaction. Transactions are more efficient.
Fairness: YBCoin’s algorithm is based on scrypt-jane algorithm, it’s a strong balance between difference equipments’ different mining efficiency. This is also to prevent specified ASIC’s monopoly of the mining. Users can mine YBCoin with CPU power.
People First: YBCoin is supported by Chinese programming team, and is Chinese language supported. Users can simply download YBCoin wallet to start mining, without complicated equipments. There’s also customer service provided through QQ messenger.
In addition, there are many bitcoin alternatives in the market now. Rough estimation of 100 bitcoin alternatives are available for mining and investment. New coins are invented regularly so be cautious when you decide which cryptocurrency to invest.