Can Bitcoin Alternatives Save The Virtual Currency?
Bitcoin has been in front of the public this past month. By going from a value of $53 to over $200 in a matter of days, the news media has been talking about it like crazy. But since the big crash, when the virtual currency dropped down below $100, Bitcoin has been struggling to rise back up. It slowly made its way back above $150, before coming down to barely higher than a hundred. Most agree that a virtual currency is what the future will look like, but will it be Bitcoin? Some innovators are trying out various alternatives which may end up becoming even bigger than Bitcoin.
The first one is called Litecoin. This is a virtual currency very similar to Bitcoin, using algorithms that follow suite, but the difference is that this algorithm is said to be less susceptible to being mined with GPUs. One big issue that many have in respect with Bitcoin is that the algorithm used can be greatly increased by using graphic cards rather than typical computers. So those who try to mine coins are now starting to use specialized computers called ASICs in order to mine them, which means the average user with a desktop has no chance to compete. Litecoin on the other hand tries to eliminate that problem.
Another alternative is called Ripple. This is a startup that aims to be a central place to transact any type of virtual currency. It was started by people who thought that converting cash to Bitcoin was too costly and difficult, because of various factors like possible fraud and the fact that all transactions in the Bitcoin network are public. So they created the Ripple currency, which they hope will become a distributed way to send money in any currency, anywhere in the world, with little to no fee.
Finally, some people think that the main problem with Bitcoin is the fact that it is completely public. So Zerocoin was created in order to change Bitcoin into a fully anonymous way to transact money. Created by researchers at the John Hopkins University, it adds code to the Bitcoin protocol so that this kind of anonymity is made possible. However to truly achieve its goals, it would require most Bitcoin users to add such a code, which may not be obvious to do.
Regardless which virtual currency ends up winning, it does appear like we are still in the very early days of this new type of monetary exchange.