Last year saw Bitcoin’s value balloon rapaciously, but its stunning ascent now seems to have faltered.
Slow transactions, exorbitant energy usage and the looming threat of regulations have all raised doubts about the future of the world’s most prolific cryptocurrency.
Even so, the technology behind Bitcoin has piqued the interest of financial industry figures.
As a result, alternatives to Bitcoin – each with distinctive advantages – are springing up all the time. Here are six of the hottest cryptocurrencies tipped for success by those in the know:
The number two
Ether is the cryptocurrency with the second highest total value after Bitcoin: US$99bil (RM385.66bil). The currency is particularly well suited for so-called “smart contracts”, whereby payments can be made automatically. For example, someone with travel insurance covered against flight cancellation could receive a pay-out without having to make a claim to be checked by the insurers. As soon as the cancellation is logged in travel data bases, the money could be sent out. The same principle is being tested in various industries.
The eco-friendly one
Peercoins are thought of as the environmentally conscious alternative to Bitcoin, the operation of which requires ever greater computer capacity – and vast amounts of energy.
For example, Iceland’s Bitcoin miners could use more energy this year than all the country’s private households combined, according to energy provider HS Orka.
The same is not true for Peercoins, yet it has struggled to stake out a large market share. Of the around 1500 cryptocurrencies, it ranks 159, with a market capitalisation of US$125mil (RM486.91mil).
The banks’ favourite
Some crypto-fans reckon Ripple could be the beginning of the end for the SWIFT system, currently used by most financial institutions for transfers. According to its Californian developer, Ripple can handle 1,500 transactions per second, meaning that a single payment can take just four seconds.
Some big players, including Spanish bank Santander or Swiss UBS, are already making using of it. The total worth of all Ripple coins stands at around US$50bil (RM194.77Mbil).
The machine currency
Thanks to the Internet of Things, household appliances and industrial machines are increasingly self-sufficient. If your fridge sees that you’re low on milk, it will automatically order more. Here’s where Iota comes into play, as a cryptocurrency specialising in small transactions. Transfers are free. With a total worth of US$5bil (RM19.47bil), Iota comes in 10th among the cybercoins.
The anonymous one
Cryptocurrency Dash is made with discretion in mind. Due to special masking technology, transactions cannot be tracked on the public blockchain. Critics say it attracts criminals. Another bone of contention is the algorithms used by the developers of Dash, which apparently direct a large amount of the starting coins into their pockets. Because of these controversies, Dash has already undergone two name changes. Yet with a net worth of US$6bil (RM23.37bil), it remains an important part of the crypto-world.
The law-abiding citizen
For many, the young cryptocoin Cardano is a rising star. Its creators prioritised the ability to be flexible, adapting to state regulation. China, Japan and South Korea have already gone on the offensive against cryptocurrencies; the same could well happen in Europe. This could well explain why Cardano has climbed to the cryptocurrency Top 5.
This article is featured on the ASEAN Economic Forum with The Star’s consent. It was originally published here.
Disclaimer: All opinions expressed in this article are the author’s own and do not necessarily reflect the views of the ASEAN Economic Forum.