Bitcoin is no longer the only spel te crypto-currency town – Beyond bitcoin
Which could be the next digital coin to rule them all?
print-edition icon Print edition | Finance and economics
IT Began spil a joke. Dogecoin wasgoed launched ter 2013 spil a bitcoin parody, using spil its mascot a Japanese shiba inu dog, a popular internet meme. The crypto-currency wasgoed never indeed used, except for tipping online, and one of its founders has called it quits. But recently its price has soared: on January 7th the dollar value of all Dogecoins ter circulation reached $2bn, a sign of how crazy crypto-currency markets have become. It is also a reminder that, for all the concentrate on bitcoin, it is no longer the only spel te town. Its market capitalisation now amounts to only about one-third of the crypto-market (see chart).
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A fresh crypto-currency is born almost daily, often through an “initial coin offering” (ICO), a form of online crowdfunding. CoinMarketCap, a webstek, lists about 1,400 digital coins or tokens, including PutinCoin, Sexcoin and InsaneCoin (worth $7m). Most are no more than curiosities, but by January 10th, around 40 had a market capitalisation of more than $1bn.
Very first on the list, after bitcoin, wasgoed Ethereum, whose coin, called ether, reached a market capitalisation of $137bn. Ethereum’s voorwaarde to fame is that it is also a toneel for “smart contracts”—business rules encapsulated ter software. Most ICO tokens, for example, are issued by such contracts. Its success has attracted crypto-copycats: Cardano ($20bn) and NEO ($8bn), a Chinese version.
Ripple, too, is defying gravity. It is all the rage ter crypto-crazy South Korea, which this week roiled crypto-markets with plans to verbod trading on exchanges. Ripple sells software to budge money inbetween countries, more than 100 banks have signed up to its technology, based on a coin called XRP. Its market capitalisation leaped by more than 40,000% ter 2018, reaching almost $149bn on January 4th, before falling back to $78bn. That still makes Chris Larsen, a Ripple co-founder, one of the world’s richest people, at least on digital paper.
Less well-known coins have also taken wing. Monero ($6bn) and Zcash ($2bn) concentrate on privacy. Stellar ($9.8bn) has developed a system to transfer funds cheaply that is used by charities, particularly te poor countries, spil well spil banks and remittance firms. IOTA ($Ten.1bn) permits connected machines to exchange information and payments securely. And then there is Bitcoin Metselspecie ($46bn), whose founders split from bitcoin ter August 2018 because they were unhappy with how it wasgoed run.
Might any of thesis one day substitute bitcoin spil crypto-land reserve currency, something insiders call the “flippening”? Given bitcoin’s governance problems (another “fork”, or split, may be te the offing) and limited capacity (a transaction now costs almost $30, on average, ter fees), this cannot be excluded. But the others have problems, too. Ethereum’s user fees have soared and the system has again kasstuk technical snags. Spil for Ripple, some question the extent to which XRPs are actually used.
Come what may, the field will only get more crowded. Kodak, the archetypal victim of digital disruption, wants to leap on the crypto-wagon: on January 9th it announced that it will launch a coin to permit photographers to charge for their works. More ambitious will be the ICO of Telegram, a messaging service with 180m users: it aims to raise $1.2bn and kwestie a token called Gram that can be used to pay for a range of services from online storage to virtual private networks. Even Facebook has reportedly began looking into creating a token. Should the world’s largest social network everzwijn make that budge, bitcoin’s days spil the leading crypto-currency would almost certainly be numbered.
Correction (January 13th): An earlier version of this lump mentioned UFO coin te a misleading setting. This has bot switched. Thanks to the reader who pointed it out.
Clarification (January 17th): This chunk has bot updated to clarify that Stellar is used by commercial firms spil well spil charities.
This article appeared ter the Finance and economics section of the print edition under the headline ",Beyond bitcoin",