Here’s a question that comes up often: How do I choose which crypto currency to invest in – aren’t they all the same?
There is no doubt that Bitcoin has captured the lion’s share of the crypto currency (CC) market, and that is largely due to its FAME. This phenomenon is similar to what is happening in national politics around the world, where a candidate gets the majority of votes based on FAME, rather than any proven ability or qualification to govern a country. Bitcoin is the pioneer in this market space and continues to garner almost all the market headlines. This FAME does not mean that it is perfect for the job, and it is known that Bitcoin has limitations and problems that need to be solved, however, there is disagreement in the Bitcoin world about how best to solve these problems . As the problems worsen, there is an ongoing opportunity for developers to launch new coins that address particular situations, and thus distinguish themselves from the approximately 1300 other coins in this market space. Let’s take a look at two Bitcoin rivals and explore how they differ from Bitcoin, and from each other:
Ethereum (ETH) – The Ethereum coin is known as ETHER. The main difference from Bitcoin is that Ethereum uses “smart contracts” which hold the account on the Ethereum blockchain. Smart Contracts are defined by their creators and they can interact with other contracts, make decisions, store data, and send ETHER to others. The implementation and services they offer are provided by the Ethereum network, all of which are more than Bitcoin or any other blockchain network can do. Smart Contracts can act as your autonomous agent, following your instructions and rules for spending money and initiating other transactions on the Ethereum network.
Ripple (XRP) – This coin and the Ripple network also have unique features that make it more than a digital currency like Bitcoin. Ripple developed the Ripple Transaction Protocol (RTXP), a powerful financial tool that allows exchanges on the Ripple network to transfer funds quickly and efficiently. The basic idea is to put money in “gates” where only those who know the password can unlock the funds. For financial institutions it opens up many possibilities, as it simplifies cross-border payments, reduces costs, and provides transparency and security. All this is done with the creative and intelligent use of blockchain technology.
The mainstream media covers this market with breaking news stories almost every day, however, their stories have little depth… they are usually dramatic headlines.
The Wild West show continues…
The 5 stocks crypto/blockchain picks are an average of 109% as of December 11/17. Wild swings continue in daily gyrations. Yesterday we had South Korea and China the latest to try to shoot down the boom in cryptocurrencies.
On Thursday, South Korea’s justice minister, Park Sang-ki, sent global bitcoin prices temporarily plummeting and virtual coin markets into turmoil when it was reported that regulators is preparing legislation to ban cryptocurrency trading. Later the same day, the South Korean Ministry of Strategy and Finance, one of the main member agencies of the South Korean government’s cryptocurrency regulation task force, came out and said that their department disagree with the premature statement of the Ministry of Justice about a potential cryptocurrency trading ban.
While the South Korean government says that cryptocurrency trading is nothing more than gambling, and they are worried that the industry will leave many citizens in the poor house, their real concern is the loss of income. in taxes. This is the same concern of every government.
China has become one of the largest sources of cryptocurrency mining in the world, but now the government is rumored to be looking at regulating the electricity used by mining computers. Over 80% of Bitcoin mining electricity now comes from China. By shutting down miners, the government will make it harder for Bitcoin users to verify transactions. Mining operations will move to other areas, but China is particularly attractive because of very low electricity and land costs. If China follows through on this threat, there will be a temporary loss of mining capacity, resulting in Bitcoin users seeing longer timers and higher costs for transaction verification.
This wild ride will continue, and as the internet evolves, we will see some big winners, and eventually, some big losers. Also, similar to the internet boom, or the uranium boom, it is those who enter early who prosper, while mass investors always show up at the end, buying at the top.
Stay Tuned!