Bitcoin Pops, Technical Picture Changes

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The 10 Most Important Cryptocurrencies Other Than Bitcoin

Bitcoin has not just been a trendsetter, ushering in a wave of cryptocurrencies built on a decentralized peer-to-peer network, it’s become the de facto standard for cryptocurrencies, inspiring an ever-growing legion of followers and spinoffs.

Key Takeaways

  • A cryptocurrency, broadly defined, is virtual or digital money which takes the form of tokens or “coins.”
  • Beyond that, the field of cryptocurrencies has expanded dramatically since bitcoin was launched over a decade ago, and the next great digital token may be released tomorrow, for all anyone in the crypto community knows.
  • Bitcoin continues to lead the pack of cryptocurrencies, in terms of market capitalization, user base, and popularity.
  • Virtual currencies such as Ethereum and XRP, which are being used more for enterprise solutions, have also become popular.
  • Some altcoins are being endorsed for superior or advanced features vis-à-vis bitcoins.

What Are Cryptocurrencies?

Before we take a closer look at some of these alternatives to Bitcoin, let’s step back and briefly examine what we mean by terms like cryptocurrency and altcoin. A cryptocurrency, broadly defined, is virtual or digital money which takes the form of tokens or “coins.” While some cryptocurrencies have ventured into the physical world with credit cards or other projects, the large majority remain entirely intangible.

The “crypto” in cryptocurrencies refers to complicated cryptography which allows for the creation and processing of digital currencies and their transactions across decentralized systems. Alongside this important “crypto” feature of these currencies is a common commitment to decentralization; cryptocurrencies are typically developed as code by teams who build in mechanisms for issuance (often, although not always, through a process called “mining”) and other controls.

Cryptocurrencies are almost always designed to be free from government manipulation and control, although as they have grown more popular this foundational aspect of the industry has come under fire. The currencies modeled after bitcoin are collectively called altcoins and have often tried to present themselves as modified or improved versions of bitcoin. While some of these currencies are easier to mine than bitcoin, there are tradeoffs, including greater risk brought on by lower levels of liquidity, acceptance and value retention.

Below, we’ll examine some of the most important digital currencies other than bitcoin. First, though, a caveat: it is impossible for a list like this to be entirely comprehensive. One reason for this is the fact that there are more than 2,000 cryptocurrencies in existence as of January 2020, and many of those tokens and coins enjoy immense popularity among a dedicated (if small, in some cases) community of backers and investors.

Beyond that, the field of cryptocurrencies is always expanding, and the next great digital token may be released tomorrow, for all anyone in the crypto community knows. While bitcoin is widely seen as a pioneer in the world of cryptocurrencies, analysts adopt many approaches for evaluating tokens other than BTC. It’s common, for instance, for analysts to attribute a great deal of importance to the ranking of coins relative to one another in terms of market cap. We’ve factored this into our consideration, but there are other reasons why a digital token may be included in the list as well.

1. Ethereum (ETH)

The first bitcoin alternative on our list, Ethereum is a decentralized software platform that enables Smart Contracts and Decentralized Applications (DApps) to be built and run without any downtime, fraud, control, or interference from a third party. The applications on Ethereum are run on its platform-specific cryptographic token, ether. Ether is like a vehicle for moving around on the Ethereum platform and is sought by mostly developers looking to develop and run applications inside Ethereum, or now by investors looking to make purchases of other digital currencies using ether.   Ether, launched in 2020, is currently the second-largest digital currency by market cap after bitcoin, although it lags behind the dominant cryptocurrency by a significant margin. As of January 2020, ether’s market cap is roughly 1/10 the size of bitcoin’s.

During 2020, Ethereum launched a pre-sale for ether which received an overwhelming response; this helped to usher in the age of the initial coin offering (ICO). According to Ethereum, it can be used to “codify, decentralize, secure and trade just about anything.”   Following the attack on the DAO in 2020, Ethereum was split into Ethereum (ETH) and Ethereum Classic (ETC).   As of Jan. 8, 2020, Ethereum (ETH) had a market cap of $15.6 billion and a per-token value of $142.54. 

2. Ripple (XRP)

Ripple is a real-time global settlement network that offers instant, certain and low-cost international payments. Launched in 2020, Ripple “enables banks to settle cross-border payments in real-time, with end-to-end transparency, and at lower costs.”   Ripple’s consensus ledger (its method of conformation) is unique in that it doesn’t require mining. Indeed, all of Ripple’s XRP tokens were “pre-mined” before launch, meaning that there is no “creation” of XRP over time, only the introduction and removal of XRP from the market supply according to the network’s guidelines. In this way, Ripple sets itself apart from bitcoin and many other altcoins. Since Ripple’s structure doesn’t require mining, it reduces the usage of computing power and minimizes network latency. 

So far, Ripple has seen success with its current business model; it remains one of the most enticing digital currencies among traditional financial institutions looking for ways to revolutionize cross-border payments. It is also currently the third-largest cryptocurrency in the world by overall market cap. As of Jan. 8, 2020, Ripple had a market cap of $9.2 billion and a per-token value of $0.21. 

3. Litecoin (LTC)

Litecoin, launched in 2020, was among the first cryptocurrencies to follow in the footsteps of bitcoin and has often been referred to as “silver to bitcoin’s gold.” It was created by Charlie Lee, an MIT graduate and former Google engineer. Litecoin is based on an open-source global payment network that is not controlled by any central authority and uses “scrypt” as a proof of work, which can be decoded with the help of CPUs of consumer-grade. Although Litecoin is like bitcoin in many ways, it has a faster block generation rate and hence offers a faster transaction confirmation time.   Other than developers, there are a growing number of merchants who accept Litecoin. As of Jan. 8, 2020, Litecoin had a market cap of $3.0 billion and a per-token value of $46.92, making it the sixth-largest cryptocurrency in the world. 

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4. Tether (USDT)

Tether was one of the first and most popular of a group of so-called stablecoins, cryptocurrencies which aim to peg their market value to a currency or other external reference point so as to reduce volatility. Because most digital currencies, even major ones like bitcoin, have experienced frequent periods of dramatic volatility, Tether and other stablecoins attempt to smooth out price fluctuations in order to attract users who may otherwise be cautious.

Launched in 2020, Tether describes itself as “a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.”   Effectively, this cryptocurrency allows individuals to utilize a blockchain network and related technologies to transact in traditional currencies while minimizing the volatility and complexity often associated with digital currencies. On Jan. 8, 2020, Tether was the fourth-largest cryptocurrency by market cap, with a total market cap of $4.6 billion and a per-token value of $1.00. 

5. Bitcoin Cash (BCH)

Bitcoin Cash (BCH) holds an important place in the history of altcoins because it is one of the earliest and most successful hard forks of the original bitcoin. In the cryptocurrency world, a fork takes place as the result of debates and arguments between developers and miners. Due to the decentralized nature of digital currencies, wholesale changes to the code underlying the token or coin at hand must be made due to general consensus; the mechanism for this process varies according to the particular cryptocurrency.

When different factions can’t come to an agreement, sometimes the digital currency is split, with the original remaining true to its original code and the other copy beginning life as a new version of the prior coin, complete with changes to its code. BCH began its life in August of 2020 as a result of one of these splits. The debate which led to the creation of BCH had to do with the issue of scalability; the Bitcoin network has a strict limit on the size of blocks: one megabyte (MB). BCH increases the block size from one MB to eight MB, with the idea being that larger blocks will allow for faster transaction times.   It also makes other changes, too, including the removal of the Segregated Witness protocol which impacts block space. As of Jan. 8, 2020, BCH had a market cap of $4.4 billion and a value per token of $240.80. 

6. Libra (LIBRA)

One of the most-hyped cryptocurrencies is one that, as of January 2020, has yet to even launch. By mid-2020, rumors circulated that social media giant Facebook, Inc. (FB) was developing its own cryptocurrency. Given Facebook’s incredible global reach and the potential for massive volumes of exchange across its platform, the cryptocurrency world had long speculated that the social media titan might launch its own digital token.

Rumors were formally confirmed on June 18, 2020, when Facebook released the white paper for Libra.   The tentative launch date for the token is later in 2020, as Facebook has committed to sorting through regulatory barriers before launch. Libra will be overseen in part by a new Facebook subsidiary, the financial services outfit Calibra.   When Libra does launch, it is sure to garner massive amounts of attention from those within (and outside of) the cryptocurrency sphere.

7. Monero (XMR)

Monero is a secure, private and untraceable currency. This open-source cryptocurrency was launched in April 2020 and soon spiked great interest among the cryptography community and enthusiasts. The development of this cryptocurrency is completely donation-based and community-driven.   Monero has been launched with a strong focus on decentralization and scalability, and it enables complete privacy by using a special technique called “ring signatures.” 

With this technique, there appears a group of cryptographic signatures including at least one real participant, but since they all appear valid, the real one cannot be isolated. Because of exceptional security mechanisms like this, Monero has developed something of an unsavory reputation: it has been linked to criminal operations around the world. Nonetheless, whether it is used for good or ill, there’s no denying that Monero has introduced important technological advances to the cryptocurrency space. As of Jan. 8, 2020, Monero had a market cap of $994.0 million and a per-token value of $57.16. 

8. EOS (EOS)

Aside from Libra, one of the newest digital currencies to make our list is EOS. Launched in June of 2020, EOS was created by cryptocurrency pioneer Dan Larimer. Before his work on EOS, Larimer founded the digital currency exchange Bitshares as well as the blockchain-based social media platform Steemit. Like other cryptocurrencies on this list, EOS is designed after ethereum, so it offers a platform on which developers can build decentralized applications. EOS is notable for many other reasons, though.

First, its initial coin offering was one of the longest and most profitable in history, raking in a record $4 billion or so in investor funds through crowdsourcing efforts lasting a year. EOS offers a delegated proof-of-stake mechanism which it hopes to be able to offer scalability beyond its competitors. EOS consists of EOS.IO, similar to the operating system of a computer and acting as the blockchain network for the digital currency, as well as EOS coins. EOS is also revolutionary because of its lack of a mining mechanism to produce coins. Instead, block producers generate blocks and are rewarded in EOS tokens based on their production rates. EOS includes a complex system of rules to govern this process, with the idea being that the network will ultimately be more democratic and decentralized than those of other cryptocurrencies. As of Jan. 8, 2020, EOS had a market cap of $2.7 billion and a per-token value of $2.85. 

9. Bitcoin SV (BSV)

Bitcoin SV (BSV), with “SV” in this case standing for “Satoshi Vision,” is a hard fork of Bitcoin Cash. In this sense, BSV is a fork of a fork of the original Bitcoin network. A planned network upgrade for November of 2020 resulted in a protracted debate between mining and developing factions in the BCH community, leading to a hard fork and the creation of BSV. Developers of Bitcoin SV suggest that this cryptocurrency restores Bitcoin developer Satoshi Nakamoto’s original protocol, while also allowing for new developments to increase stability and to allow for scalability. Bitcoin SV developers also prioritize security and fast transaction processing times. 

As of Jan. 8, 2020, BSV had a market cap of $2.1 billion and a per-token value of $114.43. 

10. Binance Coin (BNB)

Binance Coin (BNB) is the official token of the Binance cryptocurrency exchange platform. Founded in 2020, Binance has quickly risen to become the largest exchange of its kind globally in terms of overall trading volume. The Binance Coin token allows Binance users to trade in dozens of different cryptocurrencies efficiently on the Binance platform. BNB is used to facilitate transaction fees on the exchange and can also be used to pay for certain goods and services, including travel fees and more. 

As of Jan. 8, 2020, BNB had a market cap of $2.3 billion and a per-token value of $14.71. 

Bitcoin Core 0.17.0 Is Released: Here’s What’s New

Today marks the official release of Bitcoin Core 0.17.0, the 17th generation of Bitcoin’s original software client launched by Satoshi Nakamoto almost 10 years ago and still the dominant Bitcoin implementation on the network today. Overseen by Bitcoin Core lead maintainer Wladimir van der Laan, this latest major release was developed by some 135 contributors over a span of about seven months.

The result of well over 700 merged pull requests, Bitcoin Core 0.17.0 includes a range of performance improvements and bug fixes, as well as other changes.

Here’s an overview of some of these changes.

Improved Coin Selection

Coins in a wallet are effectively stored as separate chunks (“transaction outputs”). There is typically one chunk for each received payment; therefore, most chunks represent different amounts. When a payment is made from a wallet, different chunks are added together to make up an amount that’s large enough to make the payment, plus the fee. The different chunks often don’t add up to the exact amount needed, however, in which case a “change address” is added to the transaction, sending any leftover funds back to the same wallet.

Up until now, the Bitcoin Core wallet added different chunks together. Only then would it calculate and add the fee required to pay for the transaction. But in some cases, adding the fee to the transaction meant that the added chunks no longer made up a large enough amount, in which case an additional chunk had to be included.

Bitcoin Core 0.17.0 introduces the “Branch and Bound” algorithm designed by BitGo engineer Mark Erhardt. This offers two concrete improvements. First, the fee for each chunk is calculated before it is selected to be part of a transaction in order to avoid new chunks having to be added later. Second, the algorithm tries to match different chunks so they add up to the exact amount needed, avoiding the need for “change addresses” (where the leftover “change” gets sent) where possible. (Big wallets with lots of chunks, like those operated by exchanges or other high-traffic entities, are less likely to need change addresses than other wallets.)

Additionally, the coin selection algorithm in Bitcoin Core 0.17.0 includes an optional privacy improvement.

While it is against best practices, it’s possible to receive multiple payments to the same Bitcoin address. (This happens a lot with donation addresses, for example.) Reusing addresses is bad for privacy in itself as it’s obvious that all the coins on that address and all payments made from that address are from the same user. But it’s even worse when the different chunks tied to the same address are used in different transactions, linking them to chunks that weren’t initially associated with that address.

To fix this last problem, Bitcoin Core 0.17.0 gives users the option to prioritize adding chunks tied to the same address together in a transaction and to leave any other chunks out of the transaction where possible.

Easily Create and Use New Wallets

Since Bitcoin Core 0.15.0, it’s been possible to create several wallets that operate independently of each other. These wallets all have their own separate Bitcoin addresses, private keys and, therefore, funds. Users can utilize the different wallets for different purposes; for example, one wallet can be used for personal day-to-day purchases, another for business-related transactions, and a third just for trading. This can make accounting easier and more convenient, and users can more easily benefit from increased privacy as the different wallets cannot be linked to each other by blockchain analysis.

However, up until now, new wallets could only be created when starting up the node, and it was not available for Bitcoin Core wallet (GUI) users. Both of these limitations are now resolved. Bitcoin Core 0.17.0 lets users create new wallets whenever they’d like, and it offers this feature in the GUI.

As an added benefit, Bitcoin Core 0.17.0 introduces a feature called “Scantxoutset.” This lets users quickly verify whether their new wallet already includes coins (for example, because the private keys are imported from another wallet) by checking the unspent transaction output (UTXO) set, instead of rescanning the entire transaction history.

Non-HD to HD Wallet Upgrade

Whereas Bitcoin Core versions older than 0.13.0 still required users to back up all their private keys, all Bitcoin Core versions since have offered Hierarchical Deterministic (HD) wallets instead. HD wallet users only need to store one seed phrase (a list of words) as a backup.

However, Bitcoin Core users who upgraded their system to Bitcoin Core 0.13.0 and newer were unable to create new HD wallets. An incompatibility between non-HD wallets and HD wallets meant that these users were still stuck backing up all their private keys.

Bitcoin Core 0.17.0 now lets these users upgrade to the HD format as well. In addition, Bitcoin Core wallet users who already had HD wallets can now opt to generate or import a new HD seed.

Watch Only–Only Wallets

Bitcoin wallets typically store private keys, which allow users to spend their coins. But Bitcoin Core has also supported “Watch Only” addresses for some time now. The private keys to these addresses are not stored in the wallet, but coins attached to these addresses are still visible in the wallet. This lets users easily accept payments and keep track of their funds while, for example, storing their private keys offline.

Bitcoin Core 0.17.0 takes this concept one step further and allows users to create specific Watch Only wallets in which every address is a Watch Only address. As a concrete example, this will make it easier to use Bitcoin Core to keep track of funds in a hardware wallet or on a paper wallet in the form of an HD seed.

Partially Signed Bitcoin Transactions

While many transactions are straightforward — one user pays another — Bitcoin allows for more complex types of transactions as well. These include, for example, multisignature (multisig) transactions where several users need to sign off on sending funds, as well as privacy-enhancing CoinJoin transactions where different users merge their independent transactions into one big transaction.

To better facilitate these types of transactions, Bitcoin Core 0.17.0 introduces the BIP 174 Partially Signed Bitcoin Transaction (PSBT) framework, designed by Andrew Chow. This framework lets Bitcoin Core users sign a transaction partially, but also adds metadata to such a partially signed transaction. This metadata can be used by someone else to complete the transaction.

PSBT will be particularly useful if the standard is adopted by other wallets. As one potential use case, it could, for example, let a user protect his funds by locking them into a multisig account in which a transaction would require a signature created from the Bitcoin Core wallet, as well as a signature from a hardware wallet. Or it could let Bitcoin Core users partake in CoinJoin schemes with (other) privacy-preserving wallet users.

For now, the partially-signed-transaction feature is only for users who operate Bitcoin Core from the command line or through connected applications.

Pruning from the User Interface

Storing all (on-chain) Bitcoin transactions that ever happened, the Bitcoin blockchain is currently well over 180 gigabytes and growing every day. New Bitcoin Core users must download and validate all this data.

Thanks to a trick called “blockchain pruning,” however, these users do not necessarily need to store all this data. In pruning mode, nodes will automatically forget about older transaction data and keep only what’s necessary to operate securely. Until now, pruning mode could be enabled only through command line.

For the first time, Bitcoin Core 0.17.0 offers a convenient GUI toggle to enable pruning from the wallet, making it more accessible for casual, non-technical Bitcoin users who wish to run a full node for optimal security.

Bitcoin Pops, Technical Picture Changes

Bitcoin is a cryptocurrency which isn’t managed by a bank or agency but in which transactions are recorded in the blockchain that is public and contains records of each and every transaction that takes place. The cryptocurrency is traded by individuals with cryptographic keys that act as wallets. Bitcoin was first invented in 2009 by an anonymous founder known as Satoshi Nakamoto. Bitcoins are moved in blocks every 10 minutes on a decentralized ledger that connects blocks into a coherent chain dating back to the first genesis block. It was originally described as a peer-to-peer electronic cash but the technology has evolved to emphasize being a settlement layer rather than a payment network. This has left integrated second layer solutions, like Lightning Network, to prioritize that use case. It has remained the largest cryptocurrency by market cap.

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