Beyond Bitcoin

0
644
Bitcoin
Business Blockchain Bitcoin Currency Crypto

The rapid increase in value of cryptocurrency in late 2017 propelled bitcoin into the mainstream. At its peak, searches for bitcoin increased by 2500% compared to earlier that year. An episode of a popular sitcom featuring bitcoin was viewed by nearly 14 million people. At this point, we can confidently say that most people know about bitcoin, even if they’re still not entirely sure what it is or how it works.

But bitcoin is just the tip of the iceberg. Underneath the surface there are thousands of other lesser-known cryptocurrencies referred to as altcoins. Some of these act as direct competitors to bitcoin, while others seek to revamp specific industries or act as their own network. Some altcoins even reject decentralization altogether.

Since anyone can create their own cryptocurrency, this means that of the thousands of coins, many of them, if not most of them, could be scams. But this quality is shared by most other industries, and it would be inaccurate to judge cryptocurrency as a whole as a scam. There are numerous prominent coins that seek decentralization and have genuine projects, many of which wish to act as an alternative to central banking.

Besides bitcoin, the most popular cryptocurrency project is ethereum. Instead of acting solely as a currency, like bitcoin, ethereum is a platform that uses blockchain technology to run decentralized applications (Dapps) and smart contracts. Ethereum uses a cryptocurrency called ether to run these applications. By being decentralized, Dapps and smart contracts allow greater liberty for the user, preventing managers of a platform from abusing their power by not allowing them any to begin with.

Ethereum also allows for other cryptocurrencies to be built based on the ethereum platform, referred to as ERC20 tokens. For those that use the free speech social media platform Minds, the minds token is just one example of an ERC20 token.

It’s doubtful that libertarians will call themselves fans of the third-largest cryptocurrency, ripple, which takes a completely different approach from other cryptocurrencies. Despite using blockchain technology, ripple could still be considered centralized, and because of this, Ripple Labs can ‘print’ more currency as it wishes. Rather than operating as an alternative to large banks, its purpose is to work with banks as a tool for trading, as well as working to fulfill banking regulations.

The STEEM cryptocurrency, which is used on the social media platform Steemit, is one of the better known currencies among libertarians, despite being one of the smaller coins on this list. While many cryptocurrencies like bitcoin are only backed by their perceived value, STEEM is backed by voting power, content, and influence on Steemit.

Another popular crypto technology, cardano, works in a somewhat similar manner as ethereum. Cardano works as a platform, while using ADA as a currency for the platform. The founder, Charles Hoskinson, appears to be a libertarian, and supported Ron Paul.

For those primarily concerned with privacy, monero fulfills this need. Monero is the only major coin at the moment that guarantees total privacy. While other currencies like bitcoin could also be considered private, they use an open ledger, which means your identity could be guessed based on the transactions made to and from your wallet.

Among the thousands of cryptocurrencies, there’s no surprise that someone created one for the adult entertainment industry, called spankchain. The creators of this coin seek to eliminate the middlemen that operate cam-show websites by creating a decentralized payment system specifically for this industry. Of all the coins on this list, spankchain is the smallest, yet surprisingly well known among the crypto community due to the nature of the coin.

Lastly, there are exchange coins, notably binancecoin, which runs on Binance, a cryptocurrency exchange. Cryptocurrency trading has become so large that users on exchanges will sometimes use these exchange coins to trade between currencies. Those that trade rather often on exchanges will develop dust, which are miniscule amounts of cryptocurrency left over after a transaction and small enough that it cannot be traded. Exchanges like Binance offer to trade their own exchange coin in return for the collective dust owned by users.

Predictions can be made, but we don’t know for certain if any of these coins listed will succeed or fail. What we do know is that the success of cryptocurrency technology would be a victory for libertarians, and would directly compete against central banking. Whatever the outcome, we are currently in the midst of the cryptocurrency revolution.

Author’s note: I personally own some cardano and bitcoin, as well as small amounts of STEEM and ethereum. I therefore have a bias in favor of these coins.

Featured Image

The following two tabs change content below.
Nathan A. Kreider is the host of The Conversation, a podcast about ideas and how to spread them. He also publishes a blog and video content, including short book reviews, which can be found on his website nkreider.com. He can be contacted by email via [email protected]

Latest posts by Nathan Kreider (see all)