Bitcoin is an experimental digital currency that enables encrypted transactions anywhere in the world through peer-to-peer technology. Unlike regular money, Bitcoins are decentralized, meaning, exchange, payments, all sorts of monetary deals are collectively carried out not by banks or authorities but by participants within the network. It is one of the more prominent applications of crypto-currencies, a concept where data encryption and decryption is used to facilitate the creation and transfer of money.
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This virtual currency has seen an outrageous increase in popularity over the course of a few years since it can be exchanged for real money and has a higher value compared to traditional bank notes; but recently, the Bitcoin market has gone crazy. Prices have been going up and down for the past few months and observers are starting to question whether or not the Bitcoin economy is really destined for long-term success. During this time, a number of Bitcoin alternatives started to crop up, offering various schemes and structures that retain the Bitcoin concept at their core. Take a look at them.
Ripple is a digital currency that also doubles as a payment network. While some say it’s just trying to cash in on Bitcoin’s popularity, it is backed by large venture capital groups like Google Ventures, Lightspeed Venture Parnters, and FF Angel LLC. It runs on a credit system called XRP, where credits can be exchanged and where any kind of currency can be converted to a crypto-currency with using just a minimal transaction fee of $0.0001.
Litecoin, from the origins of the name itself, is a lite version of Bitcoin. It just grew out of Bitcoin’s open source protocol, but it differs in that it can make transactions at 2.5 minutes on the average compared to what would normally take 10 minutes on Bitcoin. The Litecoin network is supposedly capable of producing 84 million Litecoin units, much greater than the 21 million limit of the Bitcoin circulation.
What started out as a digital cash project in 2007 became a full-blown open source electronic cash system called OpenCoin. The idea revolved around the work of a certain David Cham, whose ideas inspired a cypherpunk movement in the 80s. His philosophy lies on the belief that cryptography should be used in socio-political dealings and in people’s daily lives.
In the future, don’t be surprised you’ll be able to able to pay for your RingCentral VoIP service or GoDaddy domain subscription with Bitcoins. And don’t be surprised either if these Bitcoin alternatives completely take over crypto-currency market in no time. What can’t be erased here even if the price of a Bitcoin hits an all-time high or even if it plummets to the ground is the fact that the Bitcoin currency is a mover (motivator, if you must) and shaker in the sectors of finance and technology, and it’s quickly changing the way people look at money.