The Rise of Cryptocurrencies: Top Three Alternatives to Bitcoin

Since the creation of Bitcoin, the concept of a digital currency (cryptocurrency) has taken root around the world. It is slowly being accepted not just by merchants, but by many countries in that they are creating regulations for it. Bitcoin is still the most popular cryptocurrency, but there are alternatives (or altcoins) that are gaining attention. In the crypto space, there are over 1,600 cryptocurrencies in use. There are many entrepreneurs that want to be part of this currency “revolution” by creating their own coins as well as minting them. It is important to note that cryptocurrencies are decentralized, meaning they are not controlled by a government (e.g. U.S. Dollar). Also, their value is volatile for a number of reasons, such as a small market, price is set by supply and demand, and the blockchain technology is new. Yet, it is an exciting time to invest in and use cryptocurrencies, and there is more variety in terms of coins. Let’s take a look at the top three alternatives to Bitcoin. 

 

  1. Ripple – It has a dual function of being a cryptocurrency (XRP) and a platform. The platform is an open-source protocol, which makes international transactions are faster and cheaper. In fact, the transaction fee is $0.00001. The reason for the incredibly low fee is to prevent DDos attacks. For convenience, people can make payments in any currency (e.g. Bitcoin). Ripple has RippleNet, a network of “institutional payment-providers” that enable payments to be made in real time. Also, Ripple uses a consensus ledger (RPCA), which does not utilize the blockchain technology. Verification is done through the nodes, meaning that if all of the nodes are in agreement then the transaction goes through. 
  2. Monero – It’s known as the “private” cryptocurrency. Transactions are untraceable through ring signatures and stealth addresses, which hide transaction details, such as amounts and payment destinations. They cannot be linked to a “real-world user” or to a previous transaction due to the Monero blockchain. Since it is private by default, units cannot be blacklisted by vendors or exchanges. However, Monero is the currency of choice for those on the dark web due to its untraceability. 
  3. Litecoin – Litecoin uses an open-source global payment network (decentralized) for faster transactions and can handle a higher transaction volume than Bitcoin on its blockchain. It uses mathematics to secure the network and gives users more control over their account. Litecoin offers the security of wallet encryption that allows users to view their account balance and transactions, but must provide a password to spend their coins. There is a sanity check before sending payments for added protection. Plus, miners receive a reward of 25 Litecoins per block. Its cap is 84 million, which is four times greater than Bitcoin’s cap. 

 

There many more altcoins, each with their own strengths. I am sure there will be more created on the horizon as cryptocurrency becomes more regulated and more merchants accept them. It will be interesting to see what is purchased with cryptocurrency as it becomes mainstreamed like fiat currencies.

Effective Resources to Help Strengthen your Family’s Finances

Growing up in my community, we didn’t talk about finances. The husband went to work and brought home the paycheck. The wife took care of the household and was given an allowance for household necessities. Talking about money and saving for the future weren’t spoken about and bringing them up resulted in an argument. Times have changed and speaking about finances is encouraged in families, even with young children. High schools teach Economics (or Student Finances) to help students understand the basics of running a business as well as accounting (e.g. budgeting). There are numerous books on finances, especially those to help families be smart with their money. The books below offer great tips and plans to get families started (or continue) on a bright financial path. 

 

  1. Rich Kid Smart Kid: Giving Your Child a Financial Head Start — This book is from the author who wrote Rich Dad Poor Dad, Robert Kiyosaki. He continues to educate people about finances (e.g. financial literacy) and now focuses on teaching parents how to give their children a financial head start. It provides the practical guidance needed to teach children to be financially responsible. The foundation of the book is education – learning about personal and financial success in today’s world. Kiyosaki points out that we are now in the Information Age, which is drastically different from the Industrial Age. Children have different obstacles than their parents and must learn to navigate them, and it starts with smart money management. 
  2. Family Budget Book: Gaining Control of Your Personal Finances — This is geared for families to help them gain control of their finances. This book offers “real world” advice and worksheets to help you apply what you have learned and to make it a habit. You’ll learn to address unexpected costs and to plan for future goals (e.g. a vacation). Also, you’ll uncover where your money goes when creating a budget — one that’s easy to manage and stick to! 
  3. The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About MoneyI choose this book not only for its title but also for the great advice it gives parents on talking to their children about money. The author shares his experiences with finances and those of families of various backgrounds to illustrate the importance of money management. Parents should talk to their kids about money, even answering the difficult questions about its nuances. This book will help parents to raise grounded kids who are financially smart. 

A Condensed History of Bitcoin & Cryptocurrency

Cryptocurrency is different from other kinds of legal tender in that cryptocurrency like Bitcoin isn’t regulated by any kind of federal reserve. Instead, cryptocurrency is a type of digital currency that is generated by encryption techniques, which are used to regulate the generation of new units of the cryptocurrency in question.

 

Encryption ensures that funds are accurately transferred without the need for interference from a central bank. The fact that cryptocurrency is decentralized is also seen as a tremendous asset to enthusiasts from around the world.

 

Bitcoin: The First Cryptocurrency

 

The supposed founder of Bitcoin, Satoshi Nakamoto, is a man shrouded in mystery. What is known about the creation of Bitcoin is that the first cryptocurrency came into being in late 2008 with the publication of a landmark paper by Satoshi entitled, “Bitcoin: A Peer-to-peer Electronic Cash System.”

 

In that paper, Satoshi outlined the ways in which Bitcoin would utilize the blockchain, a record keeping system for cryptocurrency transactions, in order to keep the nascent currency up and running. The first block of the blockchain wasn’t “mined” until early 2009 when Satoshi himself mined the aptly named Genesis Block.

 

A Year After Bitcoin, Rivals Appear

 

If you had purchased $1,000 of Bitcoin around the time that the Genesis Block was mined, you would have about $45,000,000 today.

 

Though that’s an impressive number, Bitcoin spurred a number of rivals that may have hampered its own success. Rivals to Bitcoin, sometimes known as altcoin, cropped up almost immediately after Bitcoin’s creation in 2008.

 

A few years after Bitcoin, rivals were purportedly offering altcoins with greater levels of anonymity, a key concern for those trafficking in altcoin, and faster transaction speeds. The Litecoin and Namecoin were early cryptocurrency rivals to Bitcoin.

 

Bitcoin Crashes Before Recovering

 

Bitcoin is today valued at around $9,500 per coin. It wasn’t always this rosy a picture. In 2013, Bitcoin had real problems. The price of Bitcoin dropped well below $1,000 for the first time, and eventually the price of Bitcoin would reach its all-time nadir of around $300 per coin.

 

Later in 2013, the value of Bitcoin would once again rise above $1,000. Four years later, Bitcoin would surpass the $10,000 mark for the first time. 

 

Bitcoin is the first cryptocurrency, which opened the door to other cryptocurrencies. As the world begins to accept cryptocurrency as a legal form of payment, it will be interesting to see how it will be regulated.