Niche cryptocurrencies are rising in value faster than Bitcoin. Here is the lowdown on Internet Computer Ethereum Lite coin and others by Sam Benstead20 May 2021
• 9:11amSince the invention of cryptocurrency Bitcoin in 2009, the number of digital coins has mushroomed. Punters have made fortunes by buying the next hot token before other investors have cottoned on, but investing in unproven coins is risky as they could end up falling flat.
Coin Market Cap, a cryptocurrency data group, estimated there were around 9,000 coins other than Bitcoin, known as “altcoins”, representing around 40c of the value of the value of the total cryptocurrency market. A new kid on the block making waves is Internet Computer, which now has a market value of $14.5bn (£10bn) and is the ninth largest cryptocurrency. The value of Internet Computer coins has reached £71 each.
But it is not the only coin to have made an impact. These are the biggest altcoins cryptocurrency fans should know about.
Internet Computer Launched last week by Definity a Swiss non-profit organisation that has raised more than $120m from prominent Silicon Valley investors, it will allow computer coders to develop software on its “block chain” network.
This would mean they no longer need to rely on cloud computing giants such as Amazon and Microsoft to host their programmes This design would prevent the local of the internet in a few key regions, Dfinity has claimed, adding that its Internet Computer system could withstand a nuclear strike because it will be based around the globe.
Dominic Williams, Dfinity’s British founder has said: “We want people to abandon traditional IT and move all systems and services to smart contracts.”
Coin base, one of the world’s largest cryptocurrency exchanges, allows trading in Internet Computer. Cryptocurrency investors have had a good start to the year Another hot altcoin which has been making headlines is Doge coin. Started as a joke in 2013 and featuring a shiba dog as its logo, it has risen 36pc in the past month and nearly 17,500pc in a year on the back of supportive tweets from Elon Musk, the boss of car company Tesla.
Its rise in value is not down to a belief the coins will become a widely adopted cryptocurrency, but due to its popularity in internet forums and opportunity it presents for investors to make a quick profit. It received a boost last week when more exchanges announced they would introduce trading, including eToro in Britain.
With more people able to buy the digital token, demand has risen. In America, leading free stockbroker Robin hood supports Doge coin, which has played a major role in driving up its price. Ethereum
Considered the biggest competitor to Bitcoin as a serious cryptocurrency, Ethereum is actually a network which allows computer applications to run on it. For instance, a file-storing application could be set up, where instead of relying on a single company such as Dropbox to keep your file, you store it on a decentralised network.
The network also offers so-called “smart contracts”, which can be set up to execute commands when certain conditions are met, such as a required number of people agreeing to a payment.
Ethereum’s “currency” is called Ether, which like other cryptocurrencies is “mined” by solving equations to validate new transactions on the network. Transactions can be processed more quickly and efficiently than with Bitcoin. Its price has risen 43pc in the past month and 1,300pc over 12 months. One Ether costs $3,500 (£2,500) and can be bought and sold on the major crypto exchanges, including eToro and Coin base. Lite coin began life in 2011 in an attempt to improve on Bitcoin. It has been described as the “silver to Bitcoin’s gold”. It is a cryptocurrency that also involves “mining”, but has some technical differences.
These include the ability to confirm transactions more quickly and the use of different algorithms when it comes to mining. Like other cryptocurrencies, its price has rallied significantly in the past year. One Lite coin now costs $290 (£205), around six times more than it did 12 months ago. Tokens can be bought and sold on most major exchanges. Ripple is significantly different from the other currencies here. It still uses a block chain network to validate transactions, but that network consists of participating financial institutions.
Ripple’s finite number of coins, called “XRP”, were not “mined” but issued. Ripple itself is a company, which has received funding from investors, so the currency has central control. Transactions are instant, and in place of a transaction fee a small amount of XRP is destroyed every time a transaction is made. This is for security reasons – to make it very expensive for someone to attempt to overload the network by putting through lots of transactions.
Unlike Bitcoin, Ripple is not aiming to replace the world’s existing financial system; just to upgrade it. Tokens have risen 525pc in the past year and now cost $1.45(£1).
How does Bitcoin compare?
Bitcoin has more credibility among and DIY professional investors due to its age. With over a decade as the leading cryptocurrency, it is regarded as more stable and likely to stick around longer than some of its new rivals, rather than a speculative bet on which the next hot altcoin will be.
Its price swings are therefore less violent than rivals. For example, it has risen 35pc this year compared with 200pc for Ethereum. That said, its price can still drop suddenly. Over the past 24 hours it has fallen 20pc in value.
