Cryptocurrencies have become largely acceptable in the world and there are over 5000 cryptocurrencies to choose from. It is no gainsay that the world has embraced this new digital innovation.
Let’s take a quick glance at cryptocurrencies that have been performing tremendously in the crypto market.
Is the oldest and first successful crypto in the world. It was created by an unknown person or group named Satoshi Nakamoto in 2008. Bitcoin performs the function of our regular government issued money. It can be used to pay for products and services and services. It can also be used as a form of investment.
Since the creation of Bitcoin, the price has risen significantly from nothing to thousands of dollars per Bitcoin. Due to the volatile nature of cryptocurrency, Bitcoin has experienced a lot of rallies and crashes, price rise and fall. In 2010, Bitcoin rose from $0.0008 to $0.08 per one Bitcoin. The all time high for Bitcoin was in 2017,when it was valued at almost $20,000 for one coin. This year, Bitcoin has experienced a rise and analysts predict it could go higher. With more acceptance comes a higher value and globally, Bitcoin is making a difference.
Bitcoin has shown so many potentials and even changed the trends in finance. Individuals, businesses and even governments invest heavily in Bitcoin, using it as a store of value. It also eliminates the “headaches” of conventional banking. With fast, cheap transaction fees that cut across borders and no unnecessary charges, Bitcoin is a game changer.
Where is my information stored on my favourite social media platform? Where do all my videos and funny pictures go? Yes! I know there are third parties who are meant to keep those data safe but what if someone can access all that information, hackers? Why is there even a third party handling all my information when I can? These were questions Vitalik Buterin and his team looked to answer in 2013 when they launched Ethereum(ETH).
Bitcoin introduced the blockchain technology to enable decentralization of financial transactions while Ethereum seeks to use blockchain technology to solve the problem of centralization in our internet space. With blockchain technology, the way it is designed makes it almost impossible to be hacked or manipulated.
Ethereum allows developers to create decentralized applications (d’Apps). This applications have proved useful in the areas of voting processes, games, assets keeping, content creation and several other areas
With Ethereum’s trustless transaction known as ‘Smart Contracts’, transactions are made based on the agreements(contracts) laid down by people on the platform. This agreement is stored publicly and cannot be changed so everyone on the database can see it and act by it when making transactions. Whilst eliminating the need for a third party, it also makes the transaction process credible and secure.
With every new cryptocurrency innovation comes a solution to a problem. Cryptocurrencies created has a lot of perks but it’s not without a fault. One of the faults of the crypto system is its volatility. The value of cryptocurrency is unstable and not predictable. The price may be very high or very low and it’s dependent on consumer behaviour per time and makes potential investors shy away from crypto.
Tether also called USDT was created as Real Coin in 2014 and renamed as Tether in November was created to solve the problem of cryptocurrency volatility and encourage crypto trading rather than holding. It belongs to the group of cryptocurrencies called “stable coins“.
It’s called a stable coin because it has a fixed price backed by the US dollars and other currencies like Euros, British Pound or Yen..Tether was designed to bridge the gap between fiat currencies and cryptocurrencies and offer stability, transparency and cheap transaction charges to users. The reasons for the stability in price of fiat currencies are the reserves that back them and the timely market actions by the controlling authorities, like central banks. Since fiat currencies are pegged to assets, such as gold or forex reserves which act as collateral, their valuations remain free from wild swings.
Ripple came into being in the year 2012 to solve the problem of international transactions which were slow and expensive. Ripple was created as a platform for global payments and settlement. Ripple is to banks what the internet is to the world, and they call this concept “Internet of Value”.
“The Internet of Value is about connecting different ledgers and blockchains, not replacing them” as being interconnected would make international payments faster and cheaper. Unlike Bitcoin which aims to remove banks as intermediaries, banks are the largest users of Ripple. Ripple is used by over a hundred financial institutions to send and settle international payments. It takes a record time of 4-5 seconds for a successful transaction.
It’s built on its own form of DLT (Distributed Ledger Technology) unlike Bitcoin and Ethereum’s blockchain technology. It’s a platform that hosts a shared ledger and uses a consensus(agreement)method to confirm transactions. It also has all 100 billion XRP mined since its creation unlike BTC and ETH that mines with each new block verification.
Bitcoin cash cryptocurrency was created from a fork of Bitcoin i.e Bitcoin Cash was carved out of Bitcoin in 2017.
Bitcoin takes about 10mins to confirm a transaction due to the block size limitation and so a lot of transactions are left pending and so BCH was created to tackle the problem of timing and charges.
Bitcoin Cash increased the size of blocks, allowing more transactions to be processed. Bitcoin Cash solves this by increasing the size of blocks between 8 MB and 32 MB, thereby enabling processing of more transactions per block. Bitcoin Cash has cheaper transfer fees (around $0.20 per transaction), so making transactions in BCH could save you more money than using Bitcoin
Bitcoin Cash and Bitcoin share several similarities. They use the same block verification method and have capped their supply at 21 million.
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In the past one year, the acceptance of Cryptocurrencies has increased..
According to CoinMarketCap, the cryptocurrency market was worth $128 billion in 2018 and then in 2019, it was worth whooping #179 billion dollars.
In 2020, the cryptocurrency market is valued at over $308 billion dollars with Bitcoin leading the market with over 61.4% dominance.
Analysts predict the value would increase in the coming years.
With each invention comes the solution to a problem which is to make life easier. What’s your favourite cryptocurrency?