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A look at some of the key cryptocurrencies people are talking about in this fast-growing arena.
Perhaps the original cryptocurrency, bitcoin was released as open-source software in 2009. It is created digitally, being ‘mined’ using computing power. Unlike traditional currencies, bitcoin is not controlled by any central bank, and relies on a digital ledger called ‘blockchain’ to provide a record of every bitcoin transaction. Bitcoin has seen its value explode to almost $5000 dollars, having been at just $500 back in late 2016. Many view bitcoin as the starting point of a new global currency system, unfettered by central banks and monetary policy, but while its usage has exploded, it is still a small part of the global marketplace. Others worry about the lack of regulation and transparency – for example, ownership of bitcoin is very hard to determine as it’s not recorded in the blockchain.
In a similar way to bitcoin, ethereum is a public blockchain network. But while bitcoin is an electronic cash system and therefore one specific application of blockchain technology, ethereum is essentially a platform that allows developers to build and deploy programming code for any decentralised blockchain application. Bitcoin users work to ‘mine’ the currency, while ethereum users work to earn ether, a crypto token. Ethereum blocks, the record of transactions, can be created much more quickly than bitcoin, which some say makes it more useful for transactions, instead of just for storing value. Ethereum allows all sorts of programmes to run on its network, and this perhaps broadens its value beyond that of bitcoin. Ether hit a high of $400 earlier in the year, then slumped, before recovering to $300.
Ripple positions itself as a complement to bitcoin, rather than its rival. The ripple network is meant to allow the transfer of any form of currency, regardless of whether it is the traditional sort, such as dollars or euros, or the new types such as bitcoin. Ripple’s XRP unit is, like bitcoin, a form of currency based on formulae, with a limited number of units that can be mined. Ripple has also risen dramatically in price, to about 36 cents, from around 0.006 cents in 2015.
Launched in 2011, litecoin proclaimed that it will be silver to bitcoin’s gold. Like bitcoin, it is also generated by mining. Litecoin’s main difference is that it can confirm transactions at a faster rate than bitcoin, meaning it can handle a higher volume thanks to faster block generation. As cryptocurrencies have become more popular, litecoin has seen its value rise from around $4 in March to over $60 in August 2017.
OmiseGo, a relative latecomer, uses public ethereum-based technology, with the goal of allowing people to use it via traditional digital wallets. It aims to become the payment gateway for Asia. Already some firms such as McDonalds in Thailand have begun accepting the currency. The overall aim of the currency is to reach people in Asia that have hitherto had little access to banking services. The price reached a high of nearly $12 in late August, before falling back towards $10.
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