By Harnath Babu, Chief Information Officer, KPMG in India
People’s currency? Fraud? Next-generation gold? Tulip bulb?
Whatever the experts may want to call cryptocurrency such as Bitcoin, it is undoubtedly one of the biggest technological advancements over the last few years – catching almost everyone’s attention. However, while many only know of Bitcoin as a cryptocurrency, there are now hundreds to choose from.
Its ilk such as Ethereum, Litecoin, Dash, ZCash and Ripple continue to strengthen the market with new ones being created apparently every other day.Notably, if the past trend continues, Bitcoin is most likely to reach the trillion mark in the next one year. Savvy investors are already betting on it. Read on to find out if the booming cryptocurrencies are here to stay!
From almost 3000 years, money has been part of the human history. Beginning from the barter system, coins and bank notes to digital money and now Bitcoin – the world’s first decentralised cryptocurrency, this is how the system has evolved over the years.Put simply, a cryptocurrency is a form of digital currency that uses peer-to-peer blockchain technology and operates in a decentralised network format.
It was in January 2009 when a programmer named Satoshi Nakamoto – a name believed to be an alias – released the first version of the open-source Bitcoin core software and the Bitcoin protocol started running. Today, there are hundreds of digital coins that have entered the crypto marketplace, and going by the market capitalisation, Bitcoin is currently the largest blockchain network and frequently used coin, followed by Litecoin, Ethereum, Bitcoin Cash and Ripple. Although as the popular cryptocurrencies soar to new heights of value, let’s have a look at some of them that are catching eyeballs recently:
Bitcoin: It all started with Bitcoin – now the de-facto standard for cryptocurrency. It has inspired the creation of several other cryptocurrencies, collectively termed as alt-coins. Bitcoin reportedly has a market cap of over USD 184 billion with one bitcoin valued at USD 10,991 as on January 24, 2018.
Ethereum: Similar to Bitcoins, Ethereum is an open-source blockchain platform that runs smart contracts.Its currency ‘Ether’ is the second largest digital currency in the market, garnering much attention from both corporations and individuals. The value of one Ether has risen from USD 8.24 on January 1, 2017 to USD 998.43 as on January 24, 2018.
Litecoin: After its launch by former Google engineer Charlie Lee in the year 2011, Litecoin instantly acquired good reputation in the market. It is said if bitcoin is digital gold, then litecoin is digital silver.
The Litecoin network creates almost four times as many coins as Bitcoin and has a faster block generation rate that converts to faster transaction confirmations. The market cap for Litecoin has risen to around USD 9.78 billion with one LTC priced at over USD 178 billion as on January 24, 2018. Notably, today LTC can be purchased easily and sold on several exchanges using all types of currencies across the world.
Ripple: Fourth largest cryptocurrency in town, Ripple is mainly geared towards banks, payment providers and digital asset exchanges. However, there’s much more that sets Ripple apart from other cryptocurrencies. The XRP (Ripple currency) doesn’t have a value of its own. It instead serves as a token to protect RippleNet,a network, against spam. Ripple is essentially a real-time global settlement network that offers instant, fail-safe, cross-border payments with maximum transparency and minimum costs.
These are but just a few examples of the massive, apparently limitless range of cryptocurrencies that have evolved and continue to evolve with a number of institutions trying to come up with their own cryptocurrencies – taking the industry by a storm. Even savvy investors, tech buffsand speculators have been caught off-guard by how market capitalization of cryptocurrencies and assets has achieved this high so quickly despite no central authority or government backing them.
While we have to wait and watch how the future of cryptocurrencies would unfold, it is most likely to become disruptive as serious blockchain platforms emerge across different verticals. But the question remains if we are witnessing an evolution of this technology with hundreds of cryptocurrencies available in the market and reports suggesting that people will begin using cryptocurrencies, not just for capital flight and a shield against hyperinflation, but most likely for real day to day trading—and this just does not mean solely buying a pizza.