Did you know that there are more than 9,000 digital currencies available? Bitcoin is the most well-known and popular digital currency, but altcoins have gained popularity.
DogeCoin and Ethereum are well-known altcoins. Elon Musk tweeted about DogeCoin.
What’s the deal? Let’s look at some of them and discuss what they are all about.
DogeCoin (), is, as you probably know, represented by the cute Shiba Inu meme. It was created by Jackson Palmer and Billy Markus, software engineers.
It started out as a joke to make fun of crypto speculation at the time. However, many people now consider it a legitimate investment.
Doge, an open-source digital currency, is not owned by anyone. It is actually owned equally by all.
Doge is similar to Bitcoin. There are a limited amount of Doge coins, so more coins can be mined. Inflation occurs when each coin becomes more valuable.
Ethereum () was a hit when Vitalik Buterin, the world’s youngest crypto-billionaire at 27, made Ethereum mainstream.
Buterin loved Bitcoin but was concerned about the technology and its ability to last.
His team of programmers and he created a new programming language to allow for more complex smart contracts.
In a crowdfunding campaign, they were able secure $24 million (US$18 millions) in funding. In 2015, Ethereum was launched.
One of the most notable features of Ethereum is its ability to create decentralised apps, or dApps as it is commonly known.
dApps are distributed on networks that are decentralised, rather than centralised servers. This reduces downtime and the chance of hackers attempting to hack common apps.
Litecoin () can be described as a replica of Bitcoin created by Charlie Lee, a computer programmer.
Lee wanted to improve Bitcoin, so he copied the code and made some changes to create a new Blockchain.
Litecoin is very similar to Bitcoin in appearance, which is normal considering how it was created. However, Lee’s changes have meant that it has a greater supply and uses an entirely new algorithm to secure its blockchain. This is quicker and more efficient than its predecessor.
XRP or Ripple
Ripple (), which is a completely new route than the other digital currencies does not seek to replace the existing financial system.
Instead, XRP works to improve the existing system from the inside. Unlike other coins, XRP doesn’t actually represent a currency. Instead, it is a token that connects currencies through transactions on RippleNet.
Users can simply exchange one currency for the other without having to go through a currency conversion.
In this way, XRP allows transactions between cryptocurrencies as well as regular fiat money.
XRP is faster than the current system that financial institutions use to move currencies between currencies. This can be costly and can take several days.
IOTA () is not like other cryptos. It does not use blockchain technology. It uses a technique called “directed acyclic diagram” (DAG).
Two transactions from the past will be approved for each transaction that passes through the network. This ties all transactions together into what IOTA calls a “Tangle”.
This system is thought to be better than blockchain, as it can operate on a larger scale and eliminates the need for miners.
This allows for faster transaction times and, unlike other blockchain networks that allow unlimited growth.