Bitcoin and Beyond: A Look At The Top Five CryptoCurrencies (March 26, 2017)

  1. Bitcoin (BTC)
    Websites: https://bitcoin.org/en/ https://www.bitcoin.com/ https://blockchain.info/
    Current Price (8:58PM) : $980.53
    Analysis:

The Bitcoin network launched in January of 2009 as the first decentralized digital currency relying on cryptography rather than a centralized authority to govern the creation and flow of the currency. A mysterious (and now incredibly wealthy) individual or organization going by the pseudonym Satoshi Nakamoto mined an estimated 1 million bitcoins (1 billion USD) before disappearing in December 2010.

The genius of bitcoin hinges on the solution of a common error with digital transactions called double spending, which allows the same money to be spent twice. Blockchain technology keeps a publicly distributed record of every transaction carried out on the network, and the transactions use a process called coinjoin to mix different coins from different transactions to ensure anonymity…sort of. A coin’s history can technically be traced but the results only show that a transaction occurred — not why the transaction took place.

One major point of discussion when thinking about investing in bitcoin has to do with the stability of the technology. Bitcoin’s programming contains a cap at 21 million bitcoins and solutions to the scaling problem continue to be heavily debated. Whether developers can maintain bitcoin as the dominant force in cryptocurrency or another more technologically stable coin takes over, bitcoin has shown the world that it’s possible for people to make secure, anonymous, nearly-instantaneous transactions without brokers or other financial intermediaries. Substituting open cryptographic processes for financial intermediaries means less money wasted on bureaucracy and more money and power to the people.

2. Ethereum (ETH)
Websites: https://www.ethereum.org/ 
Current Price: $52.05
Analysis:

Ethereum launched in July, 2015 and has quickly become the most successful altcoin to date. Pioneered by prolific cryptocurrency researcher and programmer Vitalik Buterin, Etherium offers a distributed computing platform that couples blockchain technology with smart contracts, an electronic way of enforcing agreements between strangers. Bitcoin has been characterized as an electronic currency but at this point it would be more appropriate to think of it as a commodity like gold. Smart contracts allow cryptocurrency and other applications to be tied to specific goods and services.

A bit further under the radar lie projects spun off from Etherium like MakerDao, Auger, Digix, Golem, and FirstBlood. A list of can be found here. Simply put, Etherium allows the peer-to-peer (P2P) blockchain technology of bitcoin to be easily deployed in a business-to-business (B2B) situations. The anonymity of bitcoin created a problem of credibility for blockchain technology; smart contracts represent the beginning of the solution.

3. Dash (DASH) 
Website: https://www.dash.org/
Current Price: $93.02
Analysis:

I find Dash particularly interesting because it incorporates a decentralized governance and budgeting system, allowing it to operate as the world’s first Decentralized Autonomous Organization (DAO). Dash portrays itself as a more user-friendly version of bitcoin and as a fork off the original operates in similar ways with a lot of quirky improvements. Miners can lend their dashcoin to masternodes at around 8% annual interest. Owning a masternode requires 1000 Dash and provides a vote for or against new proposals.

4. Ripple (XRP)
Website: https://ripple.com/
Current Price: $.0096
Analysis:

If Ethereum is the B2B version of Bitcoin’s peer-to-peer (P2P) network, then Ripple can be seen as the B2B to Dash’s P2P. Ripple has focused on creating a platform that allows individuals and institutions to exchange all currencies on the network while minimizing transaction time and fees. Gateways currently incorporate fiat and crypto currencies, as well as a handful of commodities. Ripple has the potential to make global banking more efficient, so I have a hard time imagining this technology disappearing in the near future.

5. Monero (XMR)
Website: https://getmonero.org/
Current Price: $19.64
Analysis:

Monero has been around since April of 2014 and seems laser-focused on security and anonymity. It remains under development but most of the success of Monero has to do with its use on darknet markets rather than mainstream integration. With a coming hard fork in September 2017 I don’t see much reason to expect a lot of growth in the coming year, but the security and scaling system of Monero seems superior to Bitcoin so in the long-term it could be a great investment. Who knows?

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