Cryptocurrencies are a big sensation, representing a new technology that seeks to disrupt how financial transactions are carried out throughout the world. Regardless of whether money is invested, sent or spent, the new technology has led to a paradigm shift in the way individuals and businesses think of money and the store of monetary value. Cryptocurrencies have been a feature for the last 8 years, but are only just coming into their own, with a total current value of more than $500 billion.
Known as distributed digital currencies, cryptocurrencies can be viewed as a type of digital money. They enable direct, extremely fast and seamless transactions between different parties. With a cryptocurrency wallet, you maintain absolute control over all your payments and balances, and you are able to spend your money easily and with full transparency.
Since you maintain complete control over your cryptocurrency account, you do not require any central authority or bank to validate financial transactions since it is all handled by the cryptocurrency’s network. In this guide, we examine the top 10 cryptocurrencies by market cap and the features that have made them so successful in a space that has more than 1,000 competing currencies.
(Disclaimer: the figures quoted below are based on data from 14 January 2018. The values and positions fluctuate continuously. Investing in Cryptocurrencies carries a high level of risk)
Market Cap: $234,096,517,385
Although Bitcoin was not the first to hit the cryptocurrency space, it is undoubtedly the first to gain widespread international recognition. It is said that Satoshi Nakamoto, the founder of Bitcoin, started working on the concept of digital currency in 2007. Although records indicate that Satoshi lives in Japan, some industry experts speculate that it is possibly a collective pseudonym used by more than one person.
Bitcoin is built on peer-to-peer technology and operates without banks or any other central authority; the management of transactions and issuance of coins is done automatically by the Bitcoin network. The architecture of the currency is open source – the network’s design is public, is not owned by anyone and is free for anyone to take part in. The unique properties that Bitcoin brings to the table open up the door to exciting new uses that are not possible using traditional payment systems.
Market Cap: $119,617,741,736
The passionate user community and unique use cases that surround Ethereum are a big reason for the excitement regarding this cryptocurrency. Some of the uses that have emerged so far include – but are not limited to – video game wagering and consensus voting, with more yet to come. Its network runs on a decentralized platform which issues smart contracts. These are applications designed to run as programmed, with no possibility of fraud, third-party interference, downtime or censorship.
The applications run on a proprietary blockchain, which is a powerful, shared, worldwide infrastructure model which not only represents ownership of property, but also moves value around. The blockchain allows Ethereum developers to move funds, store registries of promises and debts and create markets, all without counterparty risk or the interference of a middle man.
Market Cap: $81,128,287,658
Ripple’s model differs drastically from most of the other cryptocurrencies on this list. It works alongside banks to change how money is sent around the world, which is a crucial step when competing in today’s growing global economy.
Unlike Bitcoin and Ethereum, Ripple works on a centralized model; this may put off some cryptocurrency enthusiasts. This is because many people are attracted to cryptocurrencies by the fact that they do not have to put their trust in anyone to keep everything in check and control the network. In spite of this, it does seem to have a large user base that trust Ripple to take care of their funds and verify transactions.
Bitcoin Cash (BCH)
Market Cap: $43,263,176,076
August 1st, 2017 saw the first hard fork from the Bitcoin blockchain, resulting in the legacy Bitcoin currency and a new entrant that split off from it, Bitcoin Cash. At its most basic, the debate whether to use Bitcoin or Bitcoin Cash all comes down to scaling. For those unfamiliar with the concept of scaling, it can be considered as a method of trying to make cryptocurrency transactions quicker and more efficient with the growth of a coin’s user base.
Bitcoin Core, who are the developers who are leading the way in the evolution of the Bitcoin Cash currency, are currently involved in building the Lightning Network (LN) solution, that enables off-chain transactions. Through LN, large node hubs will be established which can facilitate transactions at a much faster rate than Bitcoin’s smaller, individual-run channels.
Market Cap: $19,172,005,653
ADA is the currency of the Cardano network. Although ADA may seem to have suddenly appeared out of nowhere, especially to people new to cryptocurrencies, the network has actually been in operation since 2015. Cardano is an open-source, decentralized, blockchain-based project which extends well beyond the ADA currency. ADA was the brainchild of Charles Hoskinson, the co-founder of Ethereum, and resulted from his partnership with the Cardano Foundation.
The long-term aim of Cardano is to grow into a platform for smart contracts. This is clear from the invention of Ouroboros, a new Proof-of-Stake (POS) function. For this reason, the ADA coin seeks to offer much deeper functionality, in addition to functioning cheaply, quickly and efficiently.
Market Cap: $12,984,306,379
Litecoin is an internet currency that makes it possible for instant, nearly free payments to any user across the world, thanks to its innovative peer-to-peer network. LTC’s global payment network is open source and completely decentralized. The clever algorithms used in its creation ensure that the network is secure, while empowering users to take control of their finances.
When compared to Bitcoin, this digital currency boasts much faster transaction verification times – only 2.5 minutes compared to 10 minutes for Bitcoin – as well as greatly improved efficiency. Thanks to substantial liquidity, trade volumes and extensive industry support, Litecoin has quickly established itself as a proven commerce medium that is poised to compete with the juggernaut that is Bitcoin.
Market Cap: $12,679,289,999
NEM, which is more commonly known by the coin symbol XEM, is yet another blockchain-based cryptocurrency like Bitcoin and Ethereum. However, its extended security features are what sets it apart from the two. NEM’s founders took the same technology that Bitcoin and Ethereum are built on and made it better.
The probability of third-party intrusion and spamming is much lower on NEM’s smart contracts system, while offering higher scalability. NEM can process hundreds of transactions per second, compared to only 15 on Ethereum, while offering far more use cases than its more established competitors.
Market Cap: $12,342,298,129
The Stellar Network’s native asset is the Stellar Lumen (XLM). According to the Stellar Lumen’s website, it is advertised as a distributed, open-source payments infrastructure that is built on the idea that the global community requires ‘a worldwide financial network open to anyone.’ The currency seeks to fill this need by interconnecting payment systems, institutions and individuals through the platform.
The Stellar Network’s protocols easily connect people from all parts of the world and allow for more efficient, faster cross-border transfers. The protocol functions like a more flexible and all-inclusive version of PayPal. Once you upload funds to one of the anchors on the network, credits are issued to your virtual wallet, which you can then use to make purchases or transfer directly to a second party, anywhere in the world.
Market Cap: $9,689,442,567
IOTA (Internet of Things Application) is a new digital currency that has got many people excited due to its innovative model. You can buy IOTA at a crypto exchange in a similar way to most other cryptocurrencies. However, a major difference is that it is not possible to purchase IOTA with fiat currency – it can only be traded for another cryptocurrency. What this means is that anyone who needs to get their hands on some IOTA will first have to buy another cryptocurrency like Bitcoin or Ethereum.
IOTA runs on its own proprietary technology known as Tangle, instead of a blockchain. The advantage of this is that it allows all IOTA transactions to be free of any fees, lets the currency grow organically without any limitations and enables offline transactions.
Market Cap: $8,124,938,423
Two of the greatest advantages that Dash has over most of the major cryptocurrencies are speed and low fees. Using Dash, it is possible to transfer funds to anyone in the world in four seconds at a cost of under $0.4. In addition, buying Dash is simple.
Similar to most other major digital currencies, it can be purchased at an exchange like Kraken or BitPanda in your local currency. In addition, Dash offers several locations within the United States where you can buy Dash directly from an ATM. Although ATM fees are high, it is the easiest way to obtain the currency.