Plenty has happened in the world of cryptocurrency since my last blog post. On December 13th of last year, Bitcoin had risen above $21,700 CAD, or $13,400 USD. It was just one of many heights it hit that month as it began receiving widespread coverage from major news outlets. Then, as we transitioned in to 2018, we saw prices plummet. Currently sitting at $13,365 CAD, Bitcoin is about 62% what it once was over two months’ ago. Further dividing skeptics and believers, Bitcoin has continued to act on its volatile risk. Kay Van-Peterson, who believes that bitcoin could hit $100,000 in 2018, suggests that the pull back is healthy. Keep in mind that Van-Peterson successfully predicted Bitcoin could would reach $2,000 in 2017, which in hindsight is was a minor peak. On the other hand, billionaire philanthropist Warren Buffet sees gloomy horizons for all cryptocurrencies.
Rather than continuing to speculate on numbers that change faster than seasons in Canada, I wanted to go over some of the other key players following behind Bitcoin in the crypto market.
Like Bitcoin, Ethereum is an application that leverages blockchain technology. It is decentralized and the platform is open software for developers to build on. The key difference here is motive. Bitcoin was made to be used as a form of low fee electronic cash system for digital currency. Ethereum offers digital cash exchange plus it allows developers to create applications such as Smart Contracts. It is currently second in the market to Bitcoin, following a similar trajectory in the past two months. Ethereum has been lauded for its capability and has become more approachable by big corporations due to its decentralized application support. In fact, big banks have started to see the rationale behind building applications on Ethereum’s platform.
Litecoin differs from the aforementioned cryptocurrencies in that it doesn’t have the capability of ethereum beyond cryptocurrency, but excels in a few areas bitcoin falls short. If you had FOMO during the spike mid December, you probably noticed the rising transaction fees as well a processing times for your coins to go through the system. At the time, Litecoin was easily the fastest and cheapest crypto to utilize. Litecoin was made as an alternative to Bitcoin to provide better functionality. It utilizes an algorithm modified from Bitcoin called Scrypt, which uses more memory, versus processing power from Bitcoin. It currently sits at the bottom of the top five cryptocurrencies.
Bitcoin Cash resulted from a hard fork in the network where Bitcoin Cash was split from Bitcoin. This was due to a disagreement on the block chain limits, meaning that Bitcoin Cash could no longer operate under Bitcoin’s framework. Bitcoin Cash has an increased block size limit, the capacity of transactions that happen per second.
At this point some readers may have expected me to talk about Ripple. Although Ripple sits in third place in the market, I don’t really have much direct experience with this crypto. I also wanted to shed light on a lesser known cryptocurrency that I believe has a lot of potential. IOTA, not unlike Ethereum, attempts to move beyond basic digital currency functionality. IOTA is taking an innovative approach to the Internet-of-Things. Using a technology called Tangle, seeks to create micro transactions between all devices on the network. Think, Smart technology. TVs, cars, homes, and many more, IOTA will create a network where nano payments could take place between these devices. Oh, and I forgot to mention, there are zero fees as IOTA does not rely on blockchain technology.
Welp, these are five cryptocurrencies that have captured my interest in the past few months and likely will continue to (mostly due to my anxiety produced by the big drop in January). At the moment though, numbers are slowly regaining steam. Which cryptocurrencies are you looking at right now? Any recommendations that a lot of people may not know about? Drop a comment below.
P.S. It is also interesting to note that Bitcoin, Bitcoin Cash and Litecoin all have supply limits, meaning after a certain number have been purchased, there will be no more available. I think it will be interesting to see how this may affect pricing as well as red tape. I’d imagine prices would see similar behavior to the ‘bubble’ in December as the holders of the coins would have bargaining power.