Here’s a question that arises a lot: How do I choose the cryptocurrency I 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, largely due to its popularity. This phenomenon is very similar to what happens in national politics around the world, where a candidate gets the majority of votes based on FAME, rather than any demonstrated capabilities or qualifications to govern a country. Bitcoin is a leader in this area of the market and continues to capture nearly all market headlines. This popularity does not mean that it is ideal for the job, and it is well known that Bitcoin has limitations and problems that need to be solved, however, there is disagreement in the Bitcoin world over how best to solve problems. As the problems worsen, there is a constant opportunity for developers to initiate new coins that address specific situations, thus distinguishing themselves from around 1,300 other coins in this market space. Let’s take a look at two of Bitcoin’s competitors and explore how they differ from Bitcoin and from one another:
Ethereum (ETH) Ethereum is known as Ether. The main difference from Bitcoin is that Ethereum uses “smart contracts” which are objects that maintain accounts on the Ethereum blockchain. Smart contracts are identified by their creators and can interact with other contracts, make decisions, store data, and send Ether to others. The implementation and services they provide are provided by the Ethereum network, and they all go beyond what Bitcoin or any other blockchain network can do. Smart contracts can act as your freelance agent, adhering to your guidelines and rules for spending currency and initiating other transactions on the Ethereum network.
Ripple (XRP) This currency and the Ripple network also have unique features that make it much more than just a digital currency like Bitcoin. Ripple has developed the Ripple Transaction Protocol (RTXP), which is a powerful financial tool that allows exchanges on the Ripple network to transfer funds quickly and efficiently. The basic idea is to put money in “gates” where only those who know the password can unlock the funds. For financial institutions, this opens up enormous potential, as it simplifies cross-border payments, reduces costs, and provides transparency and security. This is all done through the creative and intelligent use of blockchain technology.
The major media outlets cover this market with breaking news stories almost every day, however, there is not much depth in their stories … they are mostly just exciting headlines.
The Wild West Show continues …
Cryptocurrency / blockchain selections rose 5, on average 109% Since December 11, 2017. Wild fluctuations continue with daily fluctuations. Yesterday we had South Korea and China the last to try to bring down the cryptocurrency boom.
On Thursday, South Korea’s Justice Minister, Park Sang Ki, caused global bitcoin prices to temporarily plummet, and virtual currency markets plunged into turmoil when he said regulators were preparing legislation to ban cryptocurrency trading. Later in the day, the South Korean Ministry of Strategy and Finance, one of the key member agencies of the South Korean government’s cryptocurrency regulatory task force, came out and said its administration I do not agree With the Ministry of Justice’s premature statement about a possible cryptocurrency ban.
While the South Korean government says cryptocurrency trading is nothing more than a game, and they are concerned that the industry will leave many citizens in a poor home, their real concern is the loss of tax revenue. This is the same concern in every government.
China has grown into one of the largest sources of cryptocurrency mining in the world, but it is now rumored that the government is looking into regulating the electrical power used by the mining equipment. More than 80% of the electricity power for Bitcoin mining today comes from China. By shutting down miners, the government will make it difficult for Bitcoin users to verify transactions. Mining operations will move elsewhere, but China is particularly attractive due to its lower electricity and land costs. If China continues this threat, there will be a temporary loss of mining capacity, which will result in Bitcoin users seeing longer time and higher transaction verification costs.
This wild ride will continue, and as with the internet boom, we’ll see some big winners, and eventually some big losers. Also, similar to the internet boom, or uranium boom, those who enter early are the ones who will thrive, while mass investors always appear at the end, buying at the top.