When it comes to cryptocurrency, the first thing that comes to mind is bitcoin. But besides bitcoins, there are about a thousand other types of digital money. How do they work and how much do they cost?
Altcoins – an alternative to bitcoins
Most altcoins are just variations of bitcoin. The creators of new currencies take the existing bitcoin code and improve it at their discretion. It turns out the branching of cryptocurrencies, with a single “start” in the form of bitcoin. This process is called a “hard fork”. A hard fork occurs when users of a currency cannot agree on how digital money works.
For example, this happened with Bitcoin. A distinctive feature of bitcoin is the speed and low cost of transactions. However, cryptocurrency has become so popular that the system can no longer cope with the volume of work. As a result, Bitcoin users could wait several hours, or even days, for the operation to take place.
Bitcoin users decided it was time to improve the system. But the cryptocurrency does not have a single owner who could make new changes. A majority decision is not enough to change the decentralized cryptocurrency. It is necessary that 99 percent of users agree with the new rules and begin to comply with them. And although the decision to change the Bitcoin system was made, users could not come to a common plan of action. As a result, Bitcoin split into Bitcoin and Bitcoin Cash, and there was one more cryptocurrency on the market.
Ethereum – the currency of “smart contracts”
It is not known why the creator of “Ether” – a Canadian programmer of Russian origin, Vitaly Buterin, called it that. Perhaps due to the fact that, unlike the same bitcoin, the amount of ether is unlimited. And perhaps due to the fact that ether is the first cryptocurrency in which the technology of “smart contracts” is used, which means that it can “take the form” of any object.
The “smart contract” removes the amount of the bet from the accounts and holds it until the conditions of the contract are fulfilled – until one of the teams wins. This approach reduces human intervention and makes the machine do the job. In the future, “smart contracts” can be applied in accounting, logistics, and jurisprudence.
If bitcoin occupies 40 percent of the cryptocurrency market, then Ethereum – 18 percent, thus occupying an honorable second place in the list of popular cryptocurrencies. The value of the entire issued Ethereum reaches $ 26 billion. At the time of this writing, one “ether” cost $ 279 per unit, which is much cheaper than bitcoin.
There are many differences between bitcoin and ether. For example:
- there cannot be more than 21 million bitcoins, while the amount of “ether” is unlimited;
- blocks for storing information in the Ethereum system appear every 10-15 seconds, unlike Bitcoin, which takes 10 minutes for a new block to appear.
Litecoin – digital money for fast transactions
It occupies 2 percent of the total value of the cryptocurrency market, which is $ 2.7 billion. Litecoin appeared in 2011 thanks to former Google engineer Charles Lee. Litecoin, like Ethereum, is a hard fork from Bitcoin.
A few differences between Litecoin is the speed of transaction processing – it is faster than Bitcoin, though eth to ltc converter is popular:
- in Bitcoin blocks are created every 10 minutes;
- in Litecoin this happens faster – every 2.5 minutes.
That is why Litecoin can process more transactions than in the Bitcoin system. The amount of cryptocurrency is limited, and cannot exceed 84 million units. At the moment, you can buy one Litecoin for $ 51.