A look at the others - the alt lineup

Monday 27 April 2015

There are plenty of altcoins around. Most are bitcoin clones, but a few offer something interesting. Here’s a look at the top 10.

Bitcoin isn’t the only cryptocurrency in the village. Although it dwarfs the rest in terms of market cap and transaction volumes, there are plenty of other alternative currencies - ‘altcoins’ - that offer different features.

They can be fickle beasties, alts, with low volumes and thin orderbooks, which is one of the reasons traders love (and hate) them. Most are pegged to bitcoin, since that’s the standard way of buying them, so there is a kind of volatility-squared effect - any movements of their own are superimposed on bitcoin’s own volatility.

The vast majority are little more than clones that tweak one or other variable of bitcoin’s own code, but a handful show real innovation and/or a significant userbase. Some have lasted the course and been around for years; others come and go in days or weeks. For merchants, there’s a question of what it’s worth including as a payment option. Here’s a look at the top 10 cryptos by market cap (correct at the time of writing, but bear in mind that some of these coins are up and down like a penny stock on methamphetamine).

Alts

There are a lot of alts. A lot.

Read also: Spotlight on Dogecoin 

1. Bitcoin (BTC). The granddaddy of crypto. Needs little further explanation. Orders of magnitude more liquidity and network effect than anything else. Most alts are based directly on the bitcoin source code.

2. Ripple (XRP). Something rather different, to the extent that many crypto purists don’t regard it as a cryptocurrency at all. Ripple uses a more centralised ledger system than ‘real’ cryptocurrencies. It’s a corporate approach to electronic money that doesn’t wave many libertarians’ flags but is seeing some interest from banks. Either way, you won’t find it as a payment option on many merchant carts.

3. Litecoin (LTC). The second-largest crypto by market cap (excluding Ripple). It offers very little innovation over bitcoin, using a different mining approach that was supposed to be resistant to custom-made chips but that ended up going the same way anyway. There are four times as many coins as bitcoin (84 million in total) and transactions are four times faster. It does offer greater liquidity and a larger userbase than any other alt.

4. Dash (DASH). Formerly known as Darkcoin. Offers instant transactions and anonymity based on ‘Darksend’ mixing. Currently king of the anon coins.

5. Stellar (STR). Another corporate crypto, similar to Ripple - in fact, it was originally based on Ripple and created by Jed McCaleb, formerly of Ripple, after the two parted ways.

6. BitShares (BTS). A crypto-asset platform, rather than a currency. Again, not one you’ll see at checkouts. How (and, indeed, if) it works is rather complex, and controversial. Their flagship ‘asset’ is BitUSD, which is purportedly a decentralised asset pegged to the US dollar. Maybe.

7. MaidSafeCoin (MSC). MaidSafe (Massive Array of Internet Disks - Secure Access For Everyone) is a protocol by which users offer their hard drives for storage - creating a decentralised web platform - in return for Safecoins. It has not yet launched. MSC have very low volumes and the price rockets up and down on thin orderbooks. Yet again, not one for the merchant carts.

8. Dogecoin (DOGE). Initially created as a joke on the internet’s Doge meme, DOGE has grown into a thriving community of people who don’t take crypto quite as seriously as the others. They’re a fun bunch, and DOGE has good liquidity because they’re happy to throw it around for all kinds of purposes - tipping, charity, sponsoring the Jamaican bobsleigh team...

9. Nxt (NXT). Something different. A whole crypto platform supporting crypto assets, messaging/storage, a built-in decentralised digital goods marketplace, crowdfunding, separate coins/tokens on the same blockchain and a bunch of other stuff, fuelled by NXT or NXTcoin, Nxt’s payment currency. Development is blazingly fast and far ahead of other platforms, but it’s also a highly decentralised community, which has pros and cons.

10. Peercoin (PPC). One of the earlier cryptos. Similar in codebase to bitcoin, but with one or two key changes. Uses hybrid proof-of-work and proof-of-stake (if that matters to you), so it’s more energy efficient, and it’s designed to be slightly inflationary.


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