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7 bitcoin alternatives

22012018 Bitcoin alternative

7 bitcoin alternatives

This is a follow-up piece to part 1, in which we discussed some of the technical limitations of the Bitcoin blockchain implementation. Today I’m going to give a brief introduction to seven[1] alternative cryptocurrencies. I will start with four strongly performing currencies which aim to address some of the issues in Bitcoin. Then I’ll introduce three more amusing alternatives.

Ripple (XRP)

Ripple was released as a cryptocurrency in 2012 and has now reached a market cap of $64billion (I lose track, that’s what it was when I wrote this). It is both a cryptocurrency (XRP) and a digital payment network. It is focussed on replacing traditional banking systems and offers an exchange for banks to use (it already has over 90 banks and the Federal Reserve as partners). It is faster than bitcoin (as it has no mining) taking around 5 seconds for a transaction (rather than 4-5 days for a wire transfer in the legacy system).

Ethereum (ETH)

Ethereum runs smart contracts rather than a currency. I.e. it facilitates the transfer of ETH if certain conditions are met. Ethereum uses Ether as the native token. It aims to eliminate third parties in industries. Ether currently has a market capitalisation of $120billion, not bad for starting out in 2015! Many users prefer Ethereum to Bitcoin as it integrates a Turing complete programming language – significantly expanding the scope of applications.

Monero (XMR)

Monero combats the pseudoanonimity issues of Bitcoin by offering a truly secure, private and untraceable currency with only selective transparency. Monero protects privacy in three ways[2]: (1) Ring Signatures (blends senders’ address with other groups’ addresses), Ring CT (hides transaction amount) and Stealth Addresses (hides receiver address). Another feature is that coins are fungible – you can switch one coin for another as they don’t store the past transactions. Notably this also reduces the space monero takes up and increases transaction speeds. Monero currently has a market cap of $6billion.

LiteCoin (LTC)

This is a fork off the Bitcoin ledger (from 2011). This is a faster and lighter version of Bitcoin  – i.e. it takes 2.5 minutes for a transaction rather than 10mins. It is capped at 84 million coins – so theoretically worth about ¼ as much as Bitcoin and currently trading at a $12billion market cap – however obviously both valuations depend on usability.

Useless Ethereum token (UET)

Possibly my favourite cryptocurrency – it’s blatantly honest. The description on the website is:

“You’re going to give some random person on the internet money, and they’re going to take it and go buy stuff with it. Probably electronics, to be honest. Maybe even a big-screen television. Seriously, don’t buy these tokens.”

However crowdsale statistics shows that $383million worth has already been contributed:

Screen Shot 2018-01-22 at 11.13.14 am

Dentacoin (DCN)

Again, the description on the website says it all: “Dentacoin is the first Blockchain concept designed for the Global Dental Industry. The Dentacoin ERC20 token is configured to be used globally by all individuals.” DCN currently comes to a market cap of $630million

Trumpcoin (TRUMP)

If you want to take your political views to an extreme – make cryptocurrency great again with Trumpcoin, it has already got a market cap of $2million. “TrumpCoin is a digital currency that is based on Bitcoin. It was created on February 20, 2016, in order to honor Donald J. Trump and to help him secure the Presidency of the United States.”

With the many ICOs hitting the market, these are just the tip of the iceberg. Personally I found these seven interesting for their own unique reasons. Please note that this blog has not been written with the intent to be investment advice. I’m also sure by the time you are reading this the market caps would have materially changed several times.

If you would like to read Part 1 of this blog please click here.

After reviewing some of Bitcoin's technical limitations, Lisa provides seven Bitcoin alternatives. Click To Tweet

[1] The number of permittable transactions/ second on Bitcoin

[2] Source: https://itsblockchain.com/monero-101/

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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3 Comments

  1. Thank you Lisa for two very interesting articles.

    I have recently been reading Robert Shiller’s book ‘ Irrational Exuberance’ which discusses the role that the media plays in the feedback loops which help to generate or enlarge financial bubbles. One thing I have noticed it that 90% of articles about cryptocurrencies in the media (including yours) show photographs of actual gold or silver coins, – creating an image of something shining and tangible – which of course they are not.

    Presumably such physical coins don’t exist in real life , so where do these images come from? Are they computer generated images or perhaps one-offs made for the sake of the photograph?

    • Fascinating point. A couple of things – Firstly, this is a generic image which has become common in representing bitcoin.
      Secondly, it is very common for humans to create physical representations of intangible concepts. This is very common in religion (eg. depicting the soul as a glow or orb), science fiction (eg. ghosts) and many other representations eg. animations of virus’ bacteria. Thirdly… there actually are some physical bitcoins: https://www.coindesk.com/10-physical-bitcoins-good-bad-ugly/ Some are rather impractical (eg. made of solid silver and worth more than their currency nomination).
      To summarize, yes there are physical bitcoins that people pay for. However the picture shown here is a generic artistic representation of what was originally intended as am intangible object.

  2. Useless Ethereum token just sounds to me like the South Sea Bubble at the peak, when it was for “a company for carrying out an undertaking of great advantage, but nobody to know what it is” (in that, the token is just that – pure speculation and they are being just as blatantly overt about it !)

    Reminds me of “A Random Walk Down Wall Street” when companies that had nothing to do with the “tronics boom” at the time put “Tronic” in their name and their share price went up for no other reason, just like those putting “Blockchain” in their name right now, and ‘dot.com’ before that.

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