Cryptocurrencies are big news on the World Wide Web right now. Most people have heard of Bitcoin, but it might surprise some to know that there are a great many other different cryptocurrenices out there to be used. In reviewing a variety of different cryptocurrencies, Ian Steadman (2014) explains of Bitcoin that:
“Bitcoin is undeniably a mainstream currency, even if it is not necessarily popular in the sense of being used by a significant proportion of society”.
Steadman goes on to argue that Bitcoin is considered to be a “legitimate asset” and a “legitimate method of payment” by those that matter. Examples of those that matter are CNBC. Unfortunately, as Ian Steadman explains, Bitcoin has had its challenges. It is argued, for example, that denial of service attacks have had the impact of manipulating the value of Bitcoin, and price fluctuations can occur that people are able to exploit. Also, Bitcoin prices have to be adjusted every minute and that is not helpful for businesses that might want to use it. Additionally, deflation could cause challenges for this form of currency, and coins could end up not circulating.
However, many do see the benefits of cryptocurrencies, despite the risk of fraud, and many alternatives have sprung up to challenge Bitcoin. Here are some of the examples that are offered up by Ian Steadman:
1. Litecoin (LTC) – Litecoin is a cryptocurrency that was launched in October of 2011. To date there are more than 17 million litecoins in circulation and the eventual litecoin total will be 84 million, with a market cap of £40 million. Litecoin is a fairly well known alternative to Bitcoin which uses some of the same ideas. It positions itself as complementary to rather than as a replacement to Bitcoin. Litecoin is said to have a faster transaction time than Bitcoin (2.5 minutes) and has four times the number of coins in circulation. It provides the possibility of smaller transaction values. It is hard to tell whether it is more secure than Bitcoin or not and this is the cause of controversy among experts in cryptocurrencies. Litecoin is likely to get added to the same exchange as Bitcoin soon, and Ian Steadman argues that this will give it the level of legitimacy it needs to potentially be able to take off, just through association with Bitcoin. Unfortunately support for it at the current time is somewhat limited, and Pirate Bay is argued by Steadman to be the biggest acceptor of the litecoin currency.
2. PPCoin (PPC) – PPCoin stands for peer to peer coin, and the currency was launched in August 2012. It is not known how many coins are in circulation, and there is no eventual cap for PPCoin at the current time. The market cap is also unknown. PPCoin is considered by some to be more secure than Bitcoin. Ian Steadman argues that “it’s a lot harder to steal PPCoin than Bitcoin”. Counterfeiting in particular is considered to be very difficult with PPCoin. It is estimated that PPCoin will grow at a rate of 1% per year. Exchanges that accept this cryptocurrency are BTC-e and Cryptonit.
3. Freicoin (FRC) – this cryptocurrency was launched in December 2012. It is not known how many freicoins are in circulation. While the eventual freicoin total will be 100 million, like PPCoin, the market cap of this cryptocurrency is unknown. Freicoin works differently from other currencies in some ways and developers have been creating new features that will make it stand out. For example, there is the Freicoin Foundation. This is a registered non-profit organisation that Steadman explains is responsible for the distribution of 80% of the initial coins to charitable and/or mutually beneficial projects. Freicoin assets are also being developed – these, argues Steadman are “a mechanism for issuing your own tokens for whatever purpose”. Example purposes are given to be stocks, bonds and lines of credit among others. There is a fee for “demurrage” taken from every transaction that is made. The cryptocurrency is traded on Vicurex and Bter.
A number of different cryptocurrenices have already come and gone. Examples provided by Steadman are SolidCoin, BBQCoin, Fairbrix and GeistGeld. These suffered the fate of attacks. What is definitely true of cryptocurrencies is that this area is fast changing and likely to remain unpredictable in at least the immediate term. Crytocurrencies are considered “instable and unpredictable”. One can only assume that this will impact their take up at least in the sort term.
Additional resource: VIdeo on the history of bitcoin and other cryptocurrencies: