While there are many cryptocurrencies available today for use and for investment, I believe that there are five that fall into a class of their own, based on market cap, increases in value in recent years, mass-market acceptance, and other factors. Please note that this list, as well as my list of new, lesser-known cryptocurrencies to check out, is subjective – it represents my opinion, and is not the result of any formal calculations or studies.
Bitcoin is a digital currency – usable for making payments without regard for the physical location of a payer or recipient.
Bitcoin was the first modern cryptocurrency and the first practical implementation of blockchain technology; it has evolved into both the best-known cryptocurrency and the one with, by far, the greatest market cap (at approximately $200-Billion).
But, Bitcoin suffers from several serious problems, which could ultimately lead to other cryptocurrencies surpassing it in many ways; to learn more about the issues involved please see the article entitled, Will Bitcoin Become The Myspace Of Cryptocurrencies?
After Bitcoin’s introduction of blockchain technology, Ethereum is, in my opinion, the next most significant cryptocurrency from a technological advancement perspective. (Technically speaking, the coins are Ether, and the platform is Ethereum, but, for simplicity’s sake, I will stick with the common, colloquial wording, and refer to both as Ethereum). Ethereum was created to facilitate the creation, execution, and implementation of smart contracts – a feature that makes Ethereum especially attractive to blockchain-related-project software developers and to firms using Initial Coin Offerings (ICOs) to raise capital. Smart contracts that automate the implementation and execution of pre-determined rules when agreed upon conditions occur protect all parties involved, eliminate confusion, and have the potential to dramatically reduce legal costs. In some ways, Ethereum is also better for commerce (whether legal or illegal) than Bitcoin: In 2015, for example, a dark web marketplace called Evolution suddenly disappeared, and its operators stole millions of dollars in Bitcoin that the site was holding in escrow – had the market been using Ethereum smart contracts, stealing the escrowed money would likely have been next to impossible. (Ethereum itself split a few years back – so, in addition to Ethereum, there is also Ethereum Classic, but that cryptocurrency does not make my list of top 5). For full disclosure, let me state both that I own some Ethereum, and that Gladius, on whose team I serve as a Security Advisor, recently raised over $12 Million in Ethereum during its token sale; one of the primary reasons that Ethereum was the coin of choice was because its smart contract capabilities allowed various features of the sale to be encoded into unbreakable contracts – a strong attraction for purchasers. Ethereum’s market cap is presently a little under $100-Billion – about half of Bitcoin’s.
Litecoin is a cryptocurrency based on Bitcoin, and was created with several improvements over Bitcoin that make it both faster and more robust. Like Bitcoin, Litecoin is intended to be used for payments between users (i.e., peer to peer) – not as tokens within some particular application or to implement smart contracts. Litecoin has been around for about seven years – skyrocketing in usage and value in the last few. Litecoin is, however, more volatile in price than Bitcoin, and is not as widely accepted for payment. Its market cap is presently a little under $10-Billion – about 1/20 of Bitcoin’s.
Bitcoin Cash (BCH)
Bitcoin Cash is another potential successor to Bitcoin, and was created last year to address the scalability shortcomings inherent in Bitcoin (that I discussed in detail in the article, Will Bitcoin Become The Myspace Of Cryptocurrencies?). Bitcoin Cash inherited the ledger of all Bitcoin transactions prior to August 1, 2017, and uses bigger blocks for transactions that have occurred since then. While many cryptocurrency experts supported the creation of Bitcoin Cash as a successor to Bitcoin, others opposed it (sometimes quite vehemently) – so Bitcoin and Bitcoin Cash continue to operate simultaneously and separately. Bitcoin Cash has a market cap of about $25-Billion, or roughly a little more than 1/8 of Bitcoin’s.
Ripple is the native cryptocurrency of the Ripple network, which provides real-time payment, transfers, and currency exchange services for financial institutions. Ripple is unlike many other blockchain applications in that (1) it is designed for use by financial institutions, not consumers or most businesses, (2) it uses a consensus process for validating transactions to be added to its ledger, and (3) it is managed by a specific company and system of validators, rather than being truly decentralized. The Ripple Network is also many times faster than Bitcoin’s. In 2017 the price of XRP skyrocketed, and the company behind Ripple theoretically now sits on tens of billions of dollars in Ripple cryptocurrency, which it has sold or converted to other cryptos. Ripple’s market cap is presently about $50-Billion – roughly half of Ethereum’s and a quarter of Bitcoin’s.
There are, of course, many other cryptocurrencies – check out my separate list of new, less-well-known cryptocurrencies that anyone interested in the field should check out.