Here's the question that often arises: How do I choose which cryptocurrency to invest in – not all?
Bitcoin has undoubtedly acquired the lion's share of the cryptocurrency market, largely due to its FAME. This phenomenon is very similar to what happens in national politics around the world, where the candidate obtains the majority of votes on the basis of FAME, rather than any proven abilities or qualifications for state rule. Bitcoin is a leader in this market and continues to get almost all market addresses. This FAME does not mean that it is perfect for the job, and it is well known that Bitcoin has limitations and problems that need to be resolved, however, there is disagreement in the world of Bitcoin about how best to solve problems. As the problems worsen, there is an ongoing opportunity for developers to start new coins that address certain situations, thus distinguishing themselves from the approximately 1,300 coins in this market space. Let's look at two Bitcoin competitors and explore how they are different from Bitcoin, and from each other:
Ethereum (ETH) – Ethereum coin known as ETHER. The main difference from Bitcoin is that Ethereum uses "smart contracts" which are account-owned objects in the Ethereum blockchain series. Smart contracts are defined by their creators and they can interact with other contracts, make decisions, store data and send ETHER to others. Implementation and services are provided through the Ethereum network, all beyond what Bitcoin or any other blockchain network can do. Smart contracts can act as your independent agent, adhere to the instructions and rules for currency spending and initiate other transactions on the Ethereum network.
Ripple (XRP) – This currency and Ripple network also have unique features that make it much more than a digital currency like Bitcoin. Ripple has developed the Ripple Transaction Protocol (RTXP), a powerful financial tool that allows exchanges on the Ripple network to transfer funds quickly and efficiently. The basic idea is to put the money in the "gates" where only those who know the password can open the funds. For financial institutions, this opens up huge potential, because it simplifies cross-border payments, reduces costs, and provides transparency and security. All this is done using creative and intelligent blockchain technology.
The mainstream media cover this market with breaking news stories almost every day, however, there is little depth to their stories … they are mostly just dramatic headlines.
The Wild West show continues …
5 shares encrypt / blockchain picks up on average 109% Since December 11th. Wild fluctuations continue with daily fluctuations. Yesterday we had South Korea and newer China trying to drop the boom in cryptocurrencies.
On Thursday, South Korea's Justice Minister Park Sang-ki temporarily sent global bitcoin prices to markets, and virtual currency markets plunged into turmoil when regulators were said to be drafting legislation to ban cryptocurrency trading. Later in the day, South Korea's Ministry of Strategy and Finance, one of the key agencies of the South Korean government's cryptocurrency task force, came out and said that their ministry disagree With a premature statement from the Ministry of Justice about a possible ban on currency circulation.
While the South Korean government says cryptocurrency trading is nothing more than gambling, and they worry that the industry will leave many citizens in the poor home, their real concern is the loss of tax revenues. This is the same concern of every government.
China has grown to become one of the largest sources of cryptocurrency mining in the world, but now it is rumored that the government is looking at regulating the electrical power used by computers working in mining. More than 80% of the electricity for Bitcoin extraction today comes from China. By closing the miners, the government will make it difficult for Bitcoin users to verify transactions. Mining operations will move elsewhere, but China is particularly attractive because of low electricity and land costs. If China pursues this threat, there will be a temporary loss of mining capacity, which will result in Bitcoin users seeing longer and higher transaction verification costs.
This wild journey will continue, and like the Internet boom, we'll see some big winners, and ultimately some big losers. Likewise, like the Internet boom, or the uranium boom, those who get early are the ones who will thrive, while the mass investors always emerge in the end, buying up.