By definition a cryptocurrency is simply a virtual type of currency which uses cryptography for security, is decentralized, and usually anonymous (http://www.investopedia.com/terms/c/cryptocurrency.asp). A cryptocurrency differs from normal currencies in that it is designed specifically for the purpose of trading digital information. The currency is entirely digital and is simply made of thousands of lines of code. Unlike federal currencies this type of money is completely decentralized. Today there are hundreds of cryptocurrencies and there are around 20 different types that are currently selling for over $1 (http://www.bankrate.com/finance/investing/cryptocurrency-alternatives-to-bitcoin-1.aspx). This very new type of currency is legal in most countries and in the United States is taxed as property not as a currency.
On January 3, 2009 Satoshi Nakamoto literally created a new currency that is entirely controlled by software. The currency, Bitcoin, was designed to be resistant to the fluctuations and political plundering of our paper currencies. The currency’s debut came right after the global banking sector’s big collapse. At the beginning bitcoins were worth less than one U.S. penny but by 2011 one bitcoin was worth around $29 (http://www.newyorker.com/magazine/2011/10/10/the-crypto-currency). Since the currency’s debut the world’s most elite hackers and internet protectors have attempted to break and hack the bitcoin code but without any luck. It is currently still the top cryptocurrency and has inspired the invention of several other virtual currencies.
Since the introduction and success of Bitcoin, several other digital currencies have been invented. These Bitcoin alternatives, or altcoins, number in the hundreds. Many of these altcoins do not last on the market too long but a few have remained steady.
Litecoin was one of the first altcoins and is currently the second largest cryptocurrency. Today Litecoin proudly proclaims to be the “silver to Bitcoin’s gold,” (https://www.cryptocoinsnews.com/altcoin/). Litecoin’s global internet currency differs from Bitcoin in several key ways. Litecoin will produce a much higher amount of available currency. Eventually it will produce 84 million litecoins overall which is about four times as many Bitcoins that will be produced (https://litecoin.org/). Additionally the Litecoin blockchain network beats out Bitcoin’s transaction volume. Even with the slight differences Litecoin is still nearly identical to its predecessor Bitcoin.
Darkcoin, or more recently known as Dash, is a cryptocurrency which has always strived to create a platform with completely anonymous transactions. This currency allows for extraordinary anonymity when trading money using Darksend which makes it impossible to trace trades. The entire operation is based on the Bitcoin software but has improved upon and experimented with the network in order to provide advantages like this superior anonymity and instant transactions. Dash is private, fast, secure, global, and provides lower fees than centralized banks (https://www.dashpay.io/what-is-dash/).
Namecoin was the very first altcoin. Like Bitcoin it is decentralized and dedicated to fighting cencorship. The companyjust turned four years old and is still considered one of the most innovative altcoins (https://namecoin.info/). The main difference between Bitocin and this altcoin is the ability of the blockchain to store data. Currently you can buy Namecoins for an exchange rate of about 1BTC for 50 Namecoins.
BitAssets are the currency of BitShares and are a type of cryptocurrency which can be traded freely against assets such as the yuan, dollar, or even gold (https://bitshares.org/how-it-works). BitShares is extremely well organized and managed. Trades are guaranteed to be executed in 10 seconds or less and BitShares offers boundless trading in Bitcoin, Gold, Silver, Euro, and Oil (https://bitshares.org/). The company is rightfully self-described as a “fair version of Wall Street,” (https://www.cryptocoinsnews.com/altcoin/). The BitAssets are completely decentralized and help people avoid price volatility. All trades can happen within the blockchain.
This cryptocurrency is still very new but an important and inevitable development for money. Even before the invention of this digital currency, transactions were becoming increasingly electronic. Paper money is becoming more obsolete with credit cards, electronic transfers, and even apps on your phone which store all your financial information and allows for purchases. Bitcoin, then, seems inevitable but many believe that all the altcoins are unnecessary and are doomed to fail. Despite this argument having altcoins does have advantages such as decentralizing cryptocurrencies even further, providing competition, and allowing experimentation with development
