What do Bitcoin, Ethereum, Litecoin and all of the other cryptocurrencies have in common? They are all built on blockchain technology, which is a distributed ledger system that allows data to be shared across a network without a central point of control.
Bitcoin is one of the most disruptive technologies in recent years, it is being embraced by a variety of new and traditional players alike. It is used by individuals, as a speculative investment and even as a means of payment.
However, it’s the blockchain technology that is attracting so much attention.
A distributed public ledger, the blockchain uses peer-to-peer networking to enable transactions without the need for intermediaries such as banks or clearing houses.
This means that users are no longer reliant on any third party but instead are able to keep complete control of their own money. Bitcoin (and other cryptocurrencies) are the first major applications of this technology.
The potential of blockchain is huge. It’s also been subject to a lot of hype. While many people see the technology as potentially revolutionary, others have seen it as nothing more than a passing fad. Is it the next big thing? We can’t know for sure, but it’s certainly worth keeping an eye on.
The future of blockchain is bright, and it is about to get brighter still. But not all cryptocurrencies will survive, as they are not the only means of creating value.
There are more blockchain-based tokens than any other technology, and their value can be found in the way they are used. Some are used to raise funds, while others have the potential to transform our world in ways we can barely imagine.
It is important to find the one that will best serve your business needs. After all, you don’t want to pick the wrong cryptocurrency and then be stuck holding a worthless asset.
What are the pros and cons of the different types of cryptocurrencies? And what is the future for these currencies?
Lucky for you, because today we’re going to discuss exactly that!
1. The Problem: No One Knows What to Do With These Weird Coins
The first issue that people had with cryptocurrency was that there wasn’t any tangible value to it. Unlike Bitcoin, where everyone was required to participate and had to hold it in their wallet until the transaction was verified, you didn’t need to use it.
In fact, at the time of its conception, most people didn’t even think the concept of cryptocurrencies could ever work. Then came the Bitcoin hype, with thousands of companies rushing to get involved.
They created everything from software applications to exchanges and online stores. But while these developments have been very positive, they were often at odds with each other.
For example, some exchanges had poor security, while others allowed you to trade with little oversight.
2. What’s Behind the Growth in Cryptocurrency?
First of all, a Few Things Have Changed The big change has come from the development of Ethereum.
In 2014, Vitalik Buterin started working on a blockchain technology called Ethereum, which is a platform for developers to create new applications and even money.
He was able to create this new application because he was able to develop the code on the Ethereum platform.
In contrast, most of the other cryptocurrency platforms are closed source, meaning that they are developed by teams who keep their projects secret. Ethereum is not open-source, but it is the most well known of the existing cryptocurrencies.
This means that when people discuss cryptocurrencies in the mainstream press, Ethereum is often mentioned as the frontrunner in the blockchain race.
3. Bitcoin: The Digital Gold Standard
So, what’s the value of Ethereum? Well, Ethereum is already being used by many companies to issue tokens. In fact, over $300 million was raised through the use of Ethereum in 2017 alone.
With Ethereum, you can build decentralized applications on top of it. This means that anyone can download the software and start building their own version of Uber or Facebook without having to go through a centralized company like Apple or Google.
So far, the best known example of this is the DAO hack. During this incident, a cryptocurrency called Ether (the native currency of Ethereum) was stolen from an online gambling site called The DAO.
However, this was not the only scam involving cryptocurrencies. Another prominent example was the infamous Mt Gox hack. When the Mt Gox exchange closed down in 2014, it resulted in about $460 million worth of Bitcoin being stolen.
4. Ethereum: Smart Contracts and Decentralized Applications
The most famous use for the Ethereum platform is smart contracts. In simple terms, these are automated programs that run once certain conditions have been met.
For example, if you’re involved in a contractual dispute, you could create a smart contract that automatically pays your opponent, rather than having to go through a court of law.
Another example is a crowdfunding system, where you can create a smart contract that will automatically pay out the investors based on how many people sign up for the project.
The best part about this is that you don’t need to give the developers access to your bank account. They will receive the money directly from your investor account, and you will get your money back when you complete the project.
5. The Road Ahead
It’s important to remember that blockchain technology isn’t entirely new. A lot of these ideas date back to the 1970s, with companies such as LINC working on a similar concept.
However, this was done by companies like IBM and not open-source. Since the advent of Ethereum, things have started to change.
Now, people are starting to use the Ethereum platform as a way of crowdfunding projects. This means that it will be much easier for you to create your own decentralized applications or smart contracts.
The Bottom Line
The key difference between Bitcoin and Ethereum is that while Bitcoin is peer-to-peer, Ethereum is more centralized. This is because Bitcoin does not require a central authority to run.
While it can also be used by centralized platforms, the core developers are still anonymous. However, Ethereum is built on top of the blockchain and so it does rely on a single central authority.
This means that there is a need for a system that will monitor the blockchain and make sure that it is running properly.
In summary, Ethereum is the leading cryptocurrency platform. Because of its success, many other cryptocurrencies have been built around it. If you’re looking for a project that is going to be profitable in the future, Ethereum is a good place to start.
The best part is that you don’t need to know any programming languages. All you need is a basic understanding of the blockchain and how it works.