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You can hardly but help have noticed how cryptocurrencies have come from seemingly nowhere to take the world by storm in 2017. What began as a humble and anonymously created experiment with Bitcoin a decade ago has now evolved into a major force in online commerce and money transfer transactions. Read on to learn about the important criteria in determining what makes the best such alternative currencies in the year 2017.
Exactly What Are Cryptocurrencies?
The simple yet encompassing definition of cryptocurrencies is that they are a kind of new money which was directly created with the idea in mind of the needs of the Internet, its e-commerce, and infrastructure. Rather than rely on a central bank or commercial bank to issue, back, transact, and regulate them, these alternative currencies are confirmed (or checked) by the user computers in the network of the currency.
Such computers are compensated with a tiny amount of the cryptocurrency as a token for their services. This is called mining. It is the primary way in which new units of the currencies become produced. It is important to realize that this mining has different rules and operations for each of the cryptocurrencies.
Advantages to Cryptocurrencies
There are several key reasons why the crytpocurrency movement is gaining power and market share in such a record breaking short amount of time. They simply possess many advantages that make it difficult for the well established paper currencies of the world to even compete against them. Among their many advantages:
- For starters, these alternative currencies prove to be entirely digital, changing the nature of money completely. They may be spent and utilized as other currencies can only dream of, primarily for cash transfers and merchant transactions across any national border or currency barrier.
- They are different from credit and debit cards that banks issue and strictly regulate. You do not require good credit or even an account at a bank of any kind to employ cryptocurrencies. Still you are able to use them for purchasing goods and services from an ever-growing array of individuals and retailer merchandisers. Consider that today, Newegg.com and Overstock.com accept leading cryptocurrency Bitcoin as a form of payment.
- The fee for using them in transactions is so much less than that with credit cards and their costly processing fees, plus they come with the added bonus of these fees going to support the cryptocurrency network.
- These alternative currencies may also be converted with lightning speed and similarly utilized to represent non- traditional currencies like domain names and consumer goods.
- Many of them feature an almost anonymous transacting nature, which makes them almost as private as paying with cash online.
- Their greatest advantage over typical paper money is that these currencies can be easily spent and also sent anywhere on earth, across national boundaries, and practically instantly. It enables international users to deal direct over the Internet with fellow users instead of having to go through the old gate-keeping third party the bank.
- They also save time in funds being held up during a transfer as well as considerable currency translation fees that banks have enjoyed a near monopoly on for centuries.
Safety is an area where cryptocurrencies typical excel as well. No form of currency will ever be entirely safe from theft and fraud, but these are among the safer ones for utilizing. They make it really hard for hackers to steal. Like you would with your cold, hard cash, you have to use some sensible precautions in order to safeguard your alternative currency coins. This starts with encrypting your digital wallet by utilizing a super strong password. You should also engage in routine backups often so that a computer crash does not cause you to lose your stored alternative currency wealth.
It is wise to maintain both the written out copy of your password and your physical backup of the cryptocurrencies in a safe and remote location. You would never hand over a digital wallet to a stranger or share your password with anyone other than your most trusted confidants. Lost, stolen, and damaged alternative currency is as gone as when you suffer the loss of real cash. You should most especially maintain the overwhelming majority of your alternative currency money offline in the digital wallet or a paper wallet alternatively.
Characteristics of the Best Cryptocurrencies
There are a variety of differing algorithms that define the various cryptocurrencies. Three main characteristics they share in common though. These are:
- Retailer Acceptance – not all merchants online accept all or even most of the cryptocurrencies nowadays. The top two to three are widely taken and have significant numbers of major partnership deals with the important e-tailers. The majority of them though are accepted with greater limitations. Some of them in our list may only be changed for still other alternative currencies. Keep in mind that many of them were conceived of and designed originally for other purposes than completing financial and merchandise transactions
- Daily Trading Volume – One of the most important of these various three characteristics is the daily trading volume. This is the total value of coins which change hands on any given day. Higher daily trading volumes mean that there is a healthy and commonplace exchange going on with the currency
- Market Capitalization – This refers to the total value of all of the coins of a given cryptocurrency which are in circulation. Higher market caps translate to a greater value per coin and many more of the alternative currency coins being available for trading and transacting
What Are the Top 10 Cryptocurrencies in 2017?
1. Bitcoin – the original cryptocurrency which was invented back in 2007, it is still definitely the most valuable of all alternative currencies in this universe. When this cryptocurrency arose, there were no rivals to it. This is how it pioneered a number of the today utilized currency characteristics of the other alt coins. Because of its mandated limited scarcity, significant first mover advantage, large an established base of users, and well-regarded reputation, it remains the highest valued of the crytpocurrencies. The reputation it has carefully built up in the last decade means that it boasts the most impressive acceptance from the most important retailers like Subway, Amazon, and even boutique chains such as Victoria’s Secret.
2. Ethereum Tokens (Ether) – Ether quickly cemented its place as the second greatest of the various cryptocurrencies in only this past year. On the first of January, one Ether Token cost $8. This year this amount has climbed to higher than $385. This means that a $100 investment in Ether made on the first day of the year 2017 would have grown to more than $5,000 in under six months. This currency is only as old as 2015 too. As such, the young upstart is already a serious challenger (and the only one so far) to its rival big brother Bitcoin. Ether has succeeded where countless other challengers have failed simply because it has numerous built in “industrial applications.” It has locked down the market on “smart contracts” which the major banks like JPMorgan Chase, Credit Suisse, ING, Santander and others have committed to support by starting the Enterprise Ethereum Alliance. The currency is already accepted for payments of electric bills, sports betting internationally, and even farmers who sell their produce directly to consumers. Other major members of the EEA include IBM, Microsoft, BP, and Intel.
3. Litecoin – the brainchild of former Google employee Charles Lee, Litecoin has done well in the years since its beginnings. It has enough years behind it now and a solid reputation which allows for many independent business in a range of categories such as gaming, electronics, web hosting, advertising, and apparel to accept it for online transactions. A little short on leading innovation, it has fallen behind Ethereum in recent years. Yet every two minutes, Litecoin’s ledger updates with a new block of transactions, meaning that its financial and merchant transactions are processed far faster than its crypto-rivals.
4. Peercoin – the origins of Peercoin date back to the sustainability worries that continuously plague the cryptocurrencies like Bitcoin. There are a handful of specialty online retailers that accept the alt coin. Yet such Peercoins can still be traded for video games, survival gear, and jewelry, among other items. Charitable organizations too will sometimes accept Peercoin donations.
5. Dash – developers Kyle Hagan and Evan Duffield created Dash. A few ground-breaking innovations have been incorporated into the currency, such as boosting the level of anonymity and the overall functioning of the operation. It was intended principally to serve as a means of electronic cash, hence the emphasis on anonymity of users. Mr. Duffield is still not satisfied, so he is actively continuing to develop this programming for Dash. While retailers do not widely accept it as of yet, there are some independent businesses which take it. It boasts one of the largest values per coin on the market today.
6. Ripple – this newer cryptocurrency has proven to be an entirely different type of alternative currency. It does not physically exchange for goods and services as do the other alt coins and mainstream currencies. Rather, it is instead more like an exchange mechanism that allows for any currency to be instantaneously converted to another one without a central exchange party. This means that no retailers accept Ripple directly, yet it is useful as a means for trading in a wide and extensive range of existing currencies and alternative currencies.
7. Blackcoin – this cryptocurrency arose with a powerful launch and slick marketing pitch that included some solid integrating into actual point of sale systems around the country and world. Yet the growth of it, so critical for it to be a major force in the currency arena, stalled out over the last months. This means that really only a relative handful of companies actually accept it in payment around the globe. Still there is a diversity among businesses which do, including shaving products, landscaping, and yoga classes.
8. Dogecoin – this aristocratic-sounding alt coin has yet to achieve the wider acceptance of many of its crypto-rivals in the space. Yet it does boast some substantial retailers despite this. Their business directory features more than 200 different firms that take it for payment. Besides this, the user base of Dogecoin is both fanatically committed and highly enthusiastic. The currency holders occasionally involve themselves in charity works and campaigns in an effort to boost the visibility and appeal of Dogecoin.
9. Primecoin – this Star Trek universe-sounding currency boasts a wide range of alternative uses beyond simply transacting things. It also can do high level mathematical research. As a novel currency contender, the transacting acceptance in retail is still low, yet scientists are rapidly embracing its potential uses in their research and experiments the world over.
10. Namecoin – among the earliest of the Bitcoin rivals and challengers, Namecoin has largely fizzled out and lacks any major retailer acceptance. Yet the creators and users of this alt coin currency do not really care, as they created it primarily to register web page domains on their network in the first place. It does excel in this regard and so meets its original purpose.