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Bitcoin is a digital currency based on a distributed ledger technology named blockchain, which you can read more about here. Bitcoin eliminates the need for centralized intermediaries like banks and credit card companies etc. when making electronic payments. If you want to pay 1 BTC to your friend, you can do it directly without having to involve your bank at all. So, two words to describe Bitcoin would be — decentralized and digital. Its aim is to create an alternative for fiat currencies, like USD, GBP, JPY etc. Bitcoin Pros
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- Being the oldest cryptocurrency, it has the biggest community of developers and investors backing it for further growth.
- It is easy to purchase Bitcoin, even for the beginners, as it is supported by all the top exchanges and wallets.
- Bitcoin is being adopted in the mainstream economy. Bloomberg, Microsoft, Overstock.com, Expedia.com and many others have started accepting payments in BTC.
- With a very slow transaction speed, Bitcoin is facing huge challenges in scaling up. A Bitcoin transaction takes about 10 minutes, and its network can process only about 7 transactions per second.
- Mining, which is an important activity for any cryptocurrency, has become highly energy-intensive in the case of Bitcoin. Bitcoin mining is now possible only with expensive, super powerful hardware that uses lots of electricity.
- Transaction fees for sending Bitcoin are also at an all-time high, making it less feasible.
Ethereum (Ether)Ethereum is the second most valuable cryptocurrency after Bitcoin. Created in 2015 by Vitalik Buterin, Ethereum is actually much more than just a digital currency. Ethereum is a blockchain-based platform for developing decentralized apps and smart contracts. Ether is the native cryptocurrency used for all the transactions on Ethereum’s blockchain. Note: Smart contracts are the agreements coded on the blockchain and they execute themselves on the fulfillment of certain pre-set conditions. What this means is that if you have an idea for a project/application that uses blockchain technology, you do not need to develop your own blockchain. You can start building it on Ethereum’s blockchain instead.
- It is the most popular platform for building smart contracts, something which is considered the next big thing in the cryptocurrency universe.
- Ethereum provides a great platform for launching the Initial Coin Offerings (ICOs) for other blockchain projects. The majority of the $5.6 billion worth of ICOs in 2017 were launched on Ethereum.
- Ethereum has a transaction speed of a few seconds against the 10 minutes or more of Bitcoin.
- Like Bitcoin, Ethereum is also facing serious issues regarding scalability. It still uses an obsolete mechanism (Proof-of-Work) to verify the transactions which is leading to network congestion. This is the same mechanism that Bitcoin uses, so just like Bitcoin, Ethereum demands a lot of electricity. It is important to note, though, that Ethereum are actively working toward a solution for this.
- Ethereum only supports one coding language — Solidity. Since developers need to learn a new language, it acts an entry barrier for them.
- Ethereum is facing stiff competition in the market from coins like NEO and Cardano which are offering similar platforms but with improved technology.
Ripple (XRP)Ripple is a very unique cryptocurrency as it is focused on solving problems related to just one industry — International Payment Transfers. It was founded in 2012 with the aim to make international transactions both fast and cheap.
- An international money transfer takes about a week. On the other hand, Ripple can make it happen within seconds. Also, the fees are considerably lower when compared to what is charged by financial institutions and other cryptocurrencies.
- Ripple has a very clear use case — international payments. The team is able to deliver the best solutions targeted at one particular industry.
- Ripple is among the few cryptocurrency platforms which are being tested out in the real world. Ripple has strategic ties with many major financial institutions and is currently being used by American Express and Santander.
- Since the company itself owns half of the coins, it is often criticized for being centralized whereas decentralization is the core idea behind cryptocurrencies.
- Banks and financial institutions, which are Ripple’s biggest users, have started developing their own cryptocurrencies for international payments.
Bitcoin Cash (BCH)As the name suggests, Bitcoin Cash has been forked from Bitcoin itself in 2016. When the developer community of Bitcoin could not come to an agreement regarding the changes required in Bitcoin’s code, it was forked into BCH. Note: A fork is when a cryptocurrency is split into two. Parent cryptocurrencies retain their features while the child cryptocurrency undergoes technological improvements. The purpose of creating BCH was to solve some of the existing problems of Bitcoin, especially regarding scalability and transaction fees. Pros of Bitcoin Cash
- Bitcoin Cash transactions are faster than Bitcoin transactions because of the increase in block size to 8MB as compared to the 1MB of Bitcoin.
- Average Bitcoin transaction fees are currently around $1.8 which has gone down to $0.067 in the case of Bitcoin Cash.
- Bitcoin Cash, like Bitcoin, is expected to be completely decentralized. But guess what, it has a CEO instead, something which has been highly criticized in the crypto world.
- BCH mining is as expensive as Bitcoin mining but gives lesser returns, so it is not a favorite among the miners.
- Bitcoin Cash is not as easily available on cryptocurrency exchanges as the other top 10 cryptocurrencies.
EOSEOS is one such cryptocurrency which is among the top 10 cryptocurrencies even before the launch of its platform. EOS token was launched through an ICO in June 2017. EOS’s platform, which is expected to launch in June 2018, is due to be a direct competitor to Ethereum and NEO. EOS has been created by Dan Larimer who is also the founder of the cryptocurrency exchange Bitshares and blockchain-based blogging site Steemit. EOS is building a platform for developers to build decentralized applications and smart contracts, but with a vast improvement in technology. Pros of EOS
- EOS is supposed to be much more scalable than Ethereum because it uses an advanced mechanism (Delegated Proof-of-Stake + Byzantine Fault Tolerance) to verify transactions. It is allegedly capable of achieving 10,000-100,000 transactions per second.
- Unlike Ethereum, which supports just one coding language, EOS supports multiple languages, including C++.
- EOS has a highly experienced team with a proven track record.
- The biggest issue is that the platform has still not been launched so no one knows for sure how good or bad it actually will be.
Cardano (ADA)Cardano was created by Charles Hoskinson, Ethereum’s co-founder, in September 2017. Like Ethereum, Cardano has also been developed as a platform for decentralized apps and smart contracts. Like EOS, the difference between Cardano and Ethereum lies in the many technological improvements it has made over Ethereum’s technology. Cardano is being considered as the 3rd and most advanced generation of blockchain technology yet (just as EOS and NEO are), making it one of the top 10 cryptocurrencies of 2018.
Pros of Cardano
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- Cardano is supported by an academic community of global researchers and scientists contributing to its blockchain development.
- Cardano is much more scalable than Ethereum with a current capability of 257 transactions per second.
- Cardano intends to bring about Interoperability meaning that it can interact with different cryptocurrencies and their infrastructures in a seamless manner.
- A lot of ideas that have been proposed by Cardano are yet to developed into the final product. So, it remains to be seen whether they will be successfully achieved or not.
- There is already huge competition in this space, from Ethereum to EOS and NEO to Fusion.
Litecoin (LTC)Litecoin was created way back in 2011 by Charlie Lee, an ex-Google employee. It was built on the blockchain of Bitcoin itself, with the purpose of improving it.
- Litecoin transactions take around 2.5 minutes while it takes 10 minutes to complete a Bitcoin transaction. This is the reason that it is called “Lite”coin.
- Average Litecoin transaction fees are around $0.179 against $1.8 of Bitcoin.
- Except for transaction speed, there is no other offering from Litecoin which can significantly differentiate it from others. It is facing stiff competition from coins which offer privacy, smart contracts, and international payments etc.
- Like Bitcoin mining, Litecoin mining is also expensive and restricted to those with specialized powerful hardware.
Stellar (XLM)Stellar was founded in 2014 by Jed McCaleb who is also the founder of Ripple. In fact, Ripple was hard forked into Stellar and the Stellar Development Foundation was born. Like Ripple, Stellar is also focused on making cross-border payments more efficient. One thing that stands out for Stellar as compared to all the other top 10 cryptocurrencies is that the Stellar Development Foundation is a non-profit organization. As you can see in the picture below, its mission is also in line with that. Pros of Stellar
- Stellar is more decentralized as compared to its closest competitor, Ripple. Also, being a non-profit, it inspires more trust than others.
- Stellar has secured strategic partnerships with over 30 banks and with organizations like Deloitte and IBM.
- There are many coins which are targeting this space of international payments, including the number 3 on our list of Top 10 cryptocurrencies — Ripple.
IOTAFounded in 2015, IOTA is the most unique coin among these top 10 cryptocurrencies. It is the only one to use a new protocol invention called ‘Tangle’ rather than blockchain technology. You have probably heard of the Internet-of-Things (IoT), a technology which enables communication between various objects with sensors, via internet. IOTA is focussed on making this technology more secure, seamless and scalable. Pros of IOTA
- Biggest advantage that IOTA offers over all other cryptocurrencies is zero transaction fees.
- When all other cryptocurrencies are struggling with scalability issues, IOTA’s technology promises infinite scalability.
- IOTA is betting on the success of another industry — Internet-of-Things, making its future even more unpredictable than the other top 10 cryptocurrencies.
- MIT Media Lab had recently discovered a security problem with Tangle.
- If the big IoT players themselves develop their own cryptocurrency then IOTA could face stiff competition
NEONEO, a Chinese cryptocurrency, was created in 2014 by Da Hongfei. Did you know that it was originally called AntShares? In fact, it only got rebranded to NEO in June 2017! NEO is often referred to as the “Chinese Ethereum” because of the similarities in its offering to that of Ethereum. It also offers a blockchain-based platform for the development of Smart contracts and launching ICOs. Pros of NEO
- NEO can complete 10,000 transactions per second compared to the 15 transactions of Ethereum.
- While Ethereum supports only one programming language, NEO supports multiple languages like C++, C#, Go, Java, making it a favorite among programmers.
- It appears to enjoy the support of the Chinese government, which gives it a clear advantage in the massive Chinese and Asian market.
- Since it is dependent on the government support, it will be worst hit if the Chinese government comes out with unfavorable policies.
- It is targeting the most competitive segment in which there is severe competition from other cryptocurrencies in top 10 — Ethereum, Cardano, EOS.