After Bitcoin appeared, people tweaked the details in Satoshi Nakamoto’s Bitcoin paper and created thousands of other cryptocurrencies. These are sometimes known as alternative coins or alt coins. This list on cryptocoincharts.info is in order of market capitalization which you get by multiplying the number of coins by the value of each coin. The total market capitalization is hundreds of billions of American dollars with quite a few coins having market caps over a billion dollars each.
It’s extremely easy to create a new cryptocoin. As of early 2018, most are built on top of another cryptocurrency network called Ethereum and are known as tokens. They function a lot like Bitcoin and they’re released to the public as initial coin offerings, or ICOs. Here’s a list of cryptocurrency marketplaces and exchanges in order of descending activity. The numbers in the markets column tell you how many trading pairs each handles.
One example of a trading pair is dollars to Bitcoin. A less common one might be Ether to Iota. Click on any exchange name to see which cryptocurrencies and tokens they trade in. If you compare them, you’ll see that only about a half dozen cryptocurrencies are widely traded at any given time. That’s how other cryptocurrencies compare with Bitcoin in market terms, but there are other differences as well. Bitcoin uses something called proof of work to secure the system where miners compete to solve cryptographic puzzles.
Litecoin, which is one of the larger alternative coins, also uses proof of work, but with a different algorithm. Some cryptocurrencies use a completely different security system altogether. Ripple uses something called ledger consensus, NEO coin uses proof of stake, and Iota uses a directed acyclic graph, and so on. Related to that, the mining process can vary by quite a bit. Neither Ripple nor Iota use mining at all and Litecoin’s mining favors a different computer architecture from Bitcoins.
Finally, some coins are designed to have practical use beyond acting as financial tokens. Ethereum’s protocol embeds a a complete programming language making it useful for building finance-driven applications. Iota’s focus is on integrating with the so-called internet of things, while Ripple’s is for international banking. Let’s say you want to get involved with other cryptocurrencies. Here are some criteria for comparing a cryptocurrency with Bitcoin. First is ease of use.
Are there places you can spend it? Can it be converted easily into your national currency? Second is the cryptocurrency’s utility. If you’re a gamer, for example, you might be especially interested in a cryptocoin that also functions as currency in the virtual world of your favorite games. Some initial coin offerings promise other benefits that are similar to stock ownership in a company that issued them. Third is the market capitalization. This is a sign of popular support which could lead to an economy growing around that coin.
Fourth is the technology behind the coin. Is it secure? How quickly are transactions processed? Can it scale for future growth? Finally, we have an unusual criterion, a coin’s origin story. Who started it? Why? How easy is it to find out who exactly they are? What were their reputations before they created their coin? Also look at how many coins are pre-mined, which means that the founders grabbed some coins before the public release.I expect we’ll see new differences among cryptocurrencies and new criteria for judging them in the years ahead. The field is still so young and innovations are still so frequent.