Bitcoin Cash

chart-5
Bitcoin Cash Percentage Increase Compared to the Average (Bit20 ETF) Starting in 2017

Bitcoin Cash is a hard fork of Bitcoin – meaning that it shares almost all of the same characteristics with Bitcoin except one: Bitcoin Cash uses 8 MB blocks while Bitcoin uses 1 MB. This adjustment to the Bitcoin protocol was made to address Bitcoin’s scalability issues. By using larger block sizes, the Bitcoin Cash protocol is designed to increase transaction speeds and decrease fees compared to Bitcoin. Those in favor of Bitcoin Cash argue that the larger block size solves Bitcoin’s scaling problem making it useful for daily transactions (e.g., for a cup of coffee) including micropayments. They also claim that the cryptocurrency that can handle small, constant transactions can also be used as a store of value, thereby replacing the need for Bitcoin. However, those opposed cast Bitcoin Cash in a much different light. They argue that a larger block size does not permanently solve the scaling problem and instead is a temporary solution that Bitcoin could easily adopt if it’s successful. Instead, Bitcoin Cash is one of many cryptocurrencies competing to be the leader in daily transactions. There are strong arguments on both sides making Bitcoin Cash very difficult to evaluate. 

Pros: Contains many of the benefits of Bitcoin including decentralization, security, immutability, and limited supply in addition to improved scalability due to the 8 MB block size; fast confirmation times (~a few seconds); low transaction fees (~$.10 per transaction); decentralized development

Cons: Provides a quick fix to the scalability issue without finding a long-term solution; Bitcoin could always increase its block size in the future to match or exceed the Bitcoin Cash block size; vulnerable to a 51% attack if a mining pool or anyone else controls over 50% of the mining power; Bitcoin Cash mining is centralized

Analysis

To perform an objective analysis, each cryptocurrency is rated based on the following factors: (1) validation method; (2) leadership; (3) community participation in development; (4) transaction volume and market capitalization; (5) industry participation; (6) security; (7) usability; (8) technical features; (9) growth; (10) legal risks; and (11) estimated time of arrival.

Validation Method

Bitcoin Cash uses the same proof-of-work (POW) system as Bitcoin to validate transactions. But its larger block size leads to expensive data storage costs, and as a result, only a few miners participate in the Bitcoin Cash network.[1] Thus, Bitcoin Cash is highly centralized (only three miners control over 50% of the hash power: Antpool, ViaBTC, and BTC.com), making it vulnerable to a 51% attack.

Leadership/Community Participation

Unlike many other cryptocurrencies, Bitcoin Cash has a decentralized development team made up of developers from Bitcoin ABC, Bitcoin Classic, Bitcoin Unlimited, Bitcoin XT, and several others.[2] This prevents any single group of developers from controlling the code. Although Bitcoin Cash does not have a prestigious leader like Vitalik Buterin of Ethereum or Brad Garlinghouse of Ripple, the cryptocurrency has many influential supporters such as Roger Ver, better known as “Bitcoin Jesus.”[3]

Transaction Volume and Market Capitalization

Bitcoin Cash has about 1/10 the transaction volume of Bitcoin (~$400M in transactions per day). Even though confirmation times and transaction fees are significantly lower for Bitcoin Cash, the network has not been fully tested. On the other hand, Bitcoin Cash does have the 4th largest market cap (~$20B) of all cryptocurrencies and just recently came into existence after the hard fork of August 2017.

Industry Participation

Bitcoin Cash is accepted at some retailers, such as Overstock.com.[4] Additionally, it can be purchased through several exchanges, such as Coinbase, Bitstamp, Binance, and many others. However, Bitcoin Cash has yet not received widespread acceptance and may only be used at very limited locations.

Security

In terms of security, Bitcoin Cash has many of the same advantages and disadvantages as Bitcoin.

Usability

Many argue that Bitcoin is meant to be used as a store of value, while Bitcoin Cash is better suited for day-to-day transactions including micropayments.[5] Although this idea makes sense in theory, it is yet to be seen whether Bitcoin Cash can maintain low transaction fees and fast confirmation times when the network is flooded with billions of transactions per day. It appears that off-chain solutions like the Lightning Network or solutions that do not require a blockchain are better suited to handle exponential increases in transaction volume[6] and micropayments.

Technical Features

As described above, Bitcoin Cash has almost all of the same features as Bitcoin. The main difference is its block size of 8 MB. This means 8 times as many transactions are included in a block, preventing the network from overloading and having a backlog of transactions that need to be confirmed. While Bitcoin’s mempool had been reaching close to 300 MB of unconfirmed transactions in January, the amount of unconfirmed transactions for Bitcoin Cash is typically under 1 MB.[7]

Growth/Legal Risks

Even though it may appear that Bitcoin Cash is a direct competitor with Bitcoin, there is an argument that the two can coexist and users can have both for different purposes. Bitcoin may end up being used as a store of value while Bitcoin Cash is the cryptocurrency for day-to-day peer-to-peer transactions. As such, Bitcoin Cash’s main competitors are other cryptocurrencies that intend to be used in a similar manner, such as Litecoin, Dash, Nano, etc. Although there are many competitors in this space, Bitcoin Cash is currently the leader according to market cap, and has room to grow as the demand for cryptocurrencies that can perform day-to-day transactions and micropayments increases. On the other hand, if Bitcoin can address its scaling issues Bitcoin Cash may lose its advantage as the leader of a niche market within cryptocurrency.

Estimated Time of Arrival

Because Bitcoin Cash shares almost all of the same features as Bitcoin, the protocol is fully developed and ready for use. Nevertheless, the Bitcoin Cash network has not been tested to the same extent as Bitcoin’s, and we won’t know for sure how well Bitcoin Cash can handle daily transactions until its required to confirm hundreds of millions or even billions per day like a credit card company.

ETA: Now

Conclusion

The future of Bitcoin Cash is very hard to predict as there are so many possible outcomes when it comes to this cryptocurrency. It may emerge as the cryptocurrency used as a store of value and for daily transactions while Bitcoin is considered old technology. On the other hand, Bitcoin Cash may become obsolete when developers discover a more permanent solution to the scaling problem, such as by using off-chain transactions or a data structure other than blockchain. Of course, the ultimate fate of Bitcoin Cash is likely somewhere in between, but because their solution to the scaling problem doesn’t seem to be a permanent one, it’s value may be surpassed by other coins down the road.

[1] https://coinsutra.com/btc-vs-bch-bitcoin-cash/

[2] https://news.bitcoin.com/developer-amaury-sechet-discusses-the-values-of-bitcoin-abc-development/

[3] https://www.cnbc.com/2017/12/20/bitcoin-jesus-says-investors-should-be-ready-in-case-bitcoin-falls-out-of-favor.html

[4] https://acceptbitcoin.cash

[5] https://bravenewcoin.com/news/for-bitcoin-is-being-a-store-of-value-more-important-than-a-payment-system/

[6] https://lightning.engineering

[7] https://dedi.jochen-hoenicke.de/queue/#30d

Ripple

chart-13
Ripple Percentage Increase Compared to the Average (Bit20 ETF) Starting in 2017

The Ripple network is a protocol that acts as an intermediary for global payments between banks. For example, Bank A can transmit a payment to Bank B using one fiat or cryptocurrency (e.g., USD) and Bank B can receive the payment in another fiat or cryptocurrency (e.g., Euros). Typically, these transactions are expensive costing around $1.6 trillion per year, and time consuming taking 3-5 days to settle. Using the Ripple network, global payments are settled in a few seconds with extremely small transaction fees. This is accomplished through the use of gateways. For example, when converting between US and Canadian dollars, Bank A transmits its payment in US dollars to a first gateway, which instructs a second gateway to release funds to Bank B. Bank B then receives the equivalent amount in Canadian dollars from the second gateway. The first gateway then owes the second gateway the payment from Bank A. Instead of transmitting an IOU, the first gateway transmits an equivalent amount of cryptocurrency (the Ripple token XRP) to the second gateway and the transaction is immediately settled. As such, the Ripple token XRP is used as a bridging currency between the gateways and also to pay transaction fees to prevent users from spamming the network.

Pros: Used in a protocol for international payments that significantly reduces transaction fees and allows for real-time settlement; strong leadership in CEO Brad Garlinghouse who held senior positions at AOL and Yahoo!; banks are beginning to test and adopt the protocol 

Cons: About 60% of Ripple tokens XRP are owned by Ripple; there are 100 billion XRP in circulation and the amount of XRP destroyed per transaction in fees is miniscule (~10 tokens are destroyed per million transactions), so the supply is not decaying and banks do not need to hold onto a large amount of XRP to use the protocol; XRP is currently being used as the bridging currency, but the banks can select another currency and are likely to select one that has higher liquidity such as bitcoin or ether; the Ripple protocol uses validator nodes to confirm transactions making it a centralized network

Analysis

To perform an objective analysis, each cryptocurrency is rated based on the following factors: (1) validation method; (2) leadership; (3) community participation in development; (4) transaction volume and market capitalization; (5) industry participation; (6) security; (7) usability; (8) technical features; (9) growth; (10) legal risks; and (11) estimated time of arrival.

Validation Method

Unlike Bitcoin, Ethereum and many other cryptocurrencies, Ripple does not use a proof-of-work (POW) or proof-of-stake (POS) system to validate transactions. Instead, a recommended list of a little over 50 trusted nodes are selected to validate transactions on the Ripple network. These nodes are operated by companies and organizations, such as Microsoft, MIT, and CGI. Although this validation method does not require the computing resources of a POW system, the network begins to resemble a client-server relationship where the trusted nodes act as servers. Unlike many other cryptocurrencies, the Ripple protocol is not decentralized and the trusted nodes have control over the network. For example, the trusted nodes control validation, vote on protocol changes, and can modify fees.[1] 

Leadership/Community Participation

The Ripple leadership includes CEO Brad Garlinghouse who previously served as President of Consumer Applications at AOL and Senior Vice President at Yahoo!. The CTO Stefan Thomas previously created several Bitcoin libraries that are currently in use by Bitcoin businesses.[2] This team has amassed years of experience and is very knowledgeable in both cryptocurrency and the broader software technology arena. Ripple includes over 50 contributors who are actively improving the functionality of the network.[3] Software updates are added on Github on a regular basis.

Transaction Volume and Market Capitalization

XRP has a market cap of about $30B and a transaction volume of over $1B per day.[4] However, while 100 billion XRP tokens have been created over 60% are owned by Ripple.[5] This means the majority of the tokens are not being circulated and if Ripple cashes out, the market could crash.

Industry Participation

Several banks have indicated an interest in the Ripple network with some beginning to experiment with the protocol. For example, Moneygram, American Express, CIBC, UBS, Banco Santander, Bank of America, YES Bank, RBC, National Bank of Australia, Unicredit, and more have agreed to test Ripple’s distributed ledger.[6]

Security

Operating in essentially a client-server system, Ripple has many of the vulnerabilities of legacy systems. If a validator node gets hacked the entire system may be compromised.

Usability

As mentioned earlier, the Ripple token XRP has two main functions: (1) as a bridging currency between two parties transacting in different currencies and (2) as a form of payment for transaction fees.[7] Unfortunately, the bridging currency doesn’t have to be XRP, and banks will likely prefer a global reserve currency having higher liquidity, such as bitcoin or ether.[8] Additionally, the transaction fees on the network are extremely small (~10 XRP per million transactions).[9] Even though this will encourage banks to use the Ripple protocol, each bank only needs a few hundred XRP to transact for years.

On the other hand, measures have been taken to encourage users to select XRP as the bridging currency in the network. CEO Brad Garlinghouse suggested that XRP removes the need for currency exchanges to maintain local currency accounts in remote locations.[10] 

Technical Features

The Ripple network includes a decentralized ledger operated by a network of servers (trusted nodes).[11] The decentralized ledger follows the Interledger Protocol (ILP), where a sender sends one form of payment (e.g., Mexican pesos) to a first gateway via a first ledger. A second gateway releases a second form of payment (e.g., Japanese yen) to a receiver via a second ledger. Then the first gateway sends a third form of payment as a bridging currency (e.g., XRP tokens) to the second gateway to settle the transaction.[12]

Because the Ripple network is not fully decentralized, it scales much better than competitors like Bitcoin and Ethereum. While Bitcoin and Ethereum can handle about 10 transactions per second, Ripple blows them out of the water in terms of scalability and delivers 1500 transactions per second! The transaction speed of Ripple is also significantly better as it takes only a few seconds to settle a transaction.[13]

Growth/Legal Risks

XRP’s potential for growth is curbed by the fact that Ripple owns over 60% of the tokens and only 10 XRP are destroyed in fees for every million transactions! Although destroying XRP over time should make the currency scarcer, the amount of XRP is only expected to decline by 0.29% over the next 100 hundred years at the current destruction rate.[14]

Additionally, even though XRP is only valued at about $1 per coin, because Ripple has issued an extremely large number of tokens, XRP’s market cap is on par with Bitcoin and Ether. Despite all of this, XRP may continue to grow as more banks and currency exchanges continue to experiment with and adopt the technology. 

Estimated Time of Arrival

Ripple is mainly in the testing phase. While further along than many other cryptocurrencies, it is yet to be seen whether banks will use the distributed ledger protocol for foreign exchanges.

ETA: 2019

Conclusion

Although many in the cryptocurrency community seem to think XRP is overvalued, because it’s not necessary as a bridging currency in the Ripple network and banks only need a marginal amount of XRP to transact via the Ripple network, there are arguments in its favor. For example, XRP is part of a protocol that has captured significant interest in the banking industry. However, the downside risk does not seem to outweigh the benefits at this point, and it’s hard to justify a $30B market cap for a token that may not be utilized in the Ripple network.

[1] https://ripple.com/insights/xrp-ledger-decentralizes-expansion-55-validator-nodes/

[2] https://ripple.com/company/leadership/

[3] https://github.com/ripple/rippled

[4] https://coinmarketcap.com/currencies/ripple/

[5] https://www.coindesk.com/counterargument-value-proposition-ripples-xrp-token/

[6] https://www.fool.com/investing/2017/12/17/5-big-banks-currently-testing-ripples-blockchain-t.aspx, http://fortune.com/2018/01/11/ripple-moneygram-xrp-cryptocurrency-bank-transfers/, https://www.influencive.com/amex-ripple-partner/

[7] https://www.coindesk.com/ripple-medieval-banking-digital-twist/

[8] https://www.forbes.com/sites/ksamani/2017/12/20/the-bear-case-for-xrp-bitcoin-futures-edition/#6810ec1d14e6

[9] https://steemit.com/cryptocurrency/@primeer/why-ripple-token-xrp-is-terribly-overvalued

[10] http://fortune.com/2018/01/11/ripple-moneygram-xrp-cryptocurrency-bank-transfers/

[11] https://ripple.com/build/fees-disambiguation/

[12] https://interledger.org/rfcs/0001-interledger-architecture/

[13] http://www.valuewalk.com/2018/01/bitcoin-vs-ethereum-vs-ripple-comparison/

[14] https://steemit.com/cryptocurrency/@primeer/why-ripple-token-xrp-is-terribly-overvalued

Ether

chart-12
Ether Percentage Increase Compared to the Average (Bit20 ETF) Starting in 2017

As a decentralized platform that utilizes blockchain technology, Ether has many of the advantages (better security, immutable, trustless, no need for a central authority) and drawbacks (scalability issues and high transaction fees) of Bitcoin. Its distinguishing feature, however, is the ability to generate and execute “smart contracts,” which are a set of terms and conditions that allow for the automated exchange of tokens or digital assets. For example, Alice may automatically receive Bob’s tokens when the Cubs win the World Series, and Bob may automatically receive Alice’s tokens when the White Sox win the World Series. Through the use of these smart contracts, companies can develop decentralized applications (dApps) on the Ethereum platform, where users receive digital assets when a particular set of conditions occur. The Ether coin is referred to as the “gas” for executing the smart contracts on the Ethereum platform, which means users have to pay a certain amount in Ether to run a contract.

Pros: Executes Turing-complete smart contracts; platform for developing dApps; allows for the exchange of a wide range of digital assets; strong leadership in Vitalik Buterin and a development team of over 200 contributors; several tokens run on the Ethereum ERC20 token standard; second largest market cap to Bitcoin

Cons: Scalability issues; rising transaction fees (has reached ~$0.50 per transaction); vulnerable to a 51% attack if a mining pool or anyone else controls over 50% of the mining power

Analysis

To perform an objective analysis, each cryptocurrency is rated based on the following factors: (1) validation method; (2) leadership; (3) community participation in development; (4) transaction volume and market capitalization; (5) industry participation; (6) security; (7) usability; (8) technical features; (9) growth; (10) legal risks; and (11) estimated time of arrival.

Validation Method

Like Bitcoin, Ethereum uses a proof-of-work (POW) system to validate transactions by miners required to solve a cryptographic riddle which is difficult to compute but easy for others to verify.[1] Therefore, mining requires a large amount of computing resources and electricity. Additionally, a POW system is vulnerable to a 51% attack, where a single miner or mining pool (made up of several miners working together who split the rewards) has more than half of the mining power of the network. As a result, the miner can refuse to validate transactions and can double-spend Ether.[2] On the other hand, the likelihood of a 51% attack is low, because this would devalue the currency that the miners are working to obtain.

Currently, Ethereum is considering switching to a proof-of-stake (POS) system called Casper, where the validator for the next block is selected based on a combination of random selection, account balance, and the number of days the coins have been held.[3] 

Leadership/Community Participation

The Ethereum Foundation is led by Vitalik Buterin, a Russian-Candian programmer and entrepreneur who co-founded Ethereum before he turned 20 and has been referred to as a “boy genius.”[4] The Ethereum Foundation includes over 200 members who are actively improving the functionality of the network.[5] Software updates are added on Github on a regular basis.

Transaction Volume and Market Capitalization

Ether has the second largest market cap to Bitcoin (~$80B) [6] and a transaction volume of about 1 million transactions per day.[7] Nevertheless, Ether has been experiencing scalability issues as transaction volume has rapidly increased leading to rising transaction fees. Multiple solutions to this problem have been proposed including a multi-layered protocol similar to Bitcoin’s Lightning Network where most transactions will occur on off-chain micropayment channels. Another proposed solution is referred to as “sharding,” where nodes no longer store the full state of the network and instead each node merely stores a subset of the data.[8] Then the nodes communicate with each other to obtain data which is not stored at a particular node. But, this system isn’t trustless since nodes need to obtain data from the other nodes. 

Industry Participation

Several players have been involved in creating dApps on the Ethereum platform. This includes CryptoKitties[9] (an extremely popular game where virtual cats have been sold for up to $100k), Eth-Tweet[10] (a microblogging service), and WeiFund[11] (a crowdfunding service). While we have not yet seen dApps created by large companies, some big businesses such as Toyota have been experimenting with applications utilizing the Ethereum blockchain.[12]

Security

In terms of security, Ether has many of the same advantages and disadvantages as Bitcoin. Executing smart contracts on the blockchain may open Ether up to additional security issues, however, because the code used to run the smart contracts is made public. Everyone in the network then has the ability to review the code, find bugs, and exploit them before the developers become aware of the bugs and are able to make corrections.

Usability

Ether is a utility token used as fuel for operating the Ethereum platform.[13] This means that each time a developer creates a smart contract or issues a token on the Ethereum platform, a designated amount of Ether is transferred. Several tokens and altcoins have been created on the Ethereum platform using the token standard ERC20. These tokens include: Tron, ICON, OmiseGo, Binance Coin, VeChain, Tether, Golem, and many others.

Technical Features

Although smart contracts can also be executed using Bitcoin, the Bitcoin smart contracts have limited functionality. Ethereum, on the other hand, uses an Ethereum Virtual Machine[14] which executes Turing-complete smart contracts that can perform just about any computation, and are not limited to exchanging tokens.[15] In this manner, additional information can be recorded and exchanged via the blockchain, such as identity information, product information, etc. Ethereum also utilizes oracles to communicate with the off-blockchain world for evaluating conditions in the contract.[16] For example, if the terms of the contract indicate that Alice will receive 100 Ether from Bob if the average temperature in Chicago is over 50 degrees in January, an oracle collects temperature data for Chicago which is then evaluated by the smart contract.

Growth/Legal Risks

Currently, there are over 32000 ERC20 token contracts executing on the Ethereum platform, and this number has been increasing at an exponential rate.[17] As developers and companies find more uses for smart contracts, the value of Ether should continue to rise. Even though the supply of Ether is technically unlimited, the issuance of Ether is capped at 18 million per year.[18]

Estimated Time of Arrival

Like Bitcoin, Ether is currently in use and several developers have created dApps and tokens on the Ethereum platform. While it is still in its infancy, developers will likely experiment with more and more uses of smart contracts.

ETA: Now

Conclusion

Ether has the advantage of being the first cryptocurrency to be used in the execution of Turing-complete smart contracts. The possibilities for these contracts are endless, and the Ethereum project has the opportunity to transform not only the legal landscape, but how people and machines exchange value.

[1] https://en.wikipedia.org/wiki/Proof-of-work_system

[2] https://learncryptography.com/cryptocurrency/51-attack

[3] https://seekingalpha.com/article/4132934-ethereums-casper-protocol-will-address-problems-proof-stake

[4] https://www.inc.com/sonya-mann/vitalik-buterin-ethereum.html

[5] https://github.com/ethereum/go-ethereum

[6] https://coinmarketcap.com/currencies/ethereum/

[7] https://www.computerworld.com/article/3245928/emerging-technology/ethereum-explores-a-fix-for-blockchains-performance-problem.html

[8] https://www.coindesk.com/information/will-ethereum-scale/

[9] https://www.cnbc.com/2017/12/06/meet-cryptokitties-the-new-digital-beanie-babies-selling-for-100k.html

[10] https://github.com/yep/eth-tweet

[11] http://weifund.io

[12] https://www.trustnodes.com/2017/05/28/toyota-prototypes-ethereum-blockchain-based-car-sharing-uber-alternative

[13] https://www.ethereum.org/ether

[14] https://themerkle.com/what-is-the-ethereum-virtual-machine/

[15] https://www.coindesk.com/information/how-ethereum-works/

[16] https://bitcoin.stackexchange.com/questions/40389/what-advantages-and-disadvantages-does-ethereum-have-over-bitcoin

[17] https://etherscan.io/tokens

[18] https://www.ethereum.org/ether

Bitcoin

chart-11
Bitcoin Percentage Increase Compared to the Average (Bit20 ETF) Starting in 2017

Bitcoin was the first cryptocurrency created and is often referred to as “digital gold.”[1] Although there are numerous advantages to being the first in its field, newcomers have built alternative cryptocurrencies (altcoins) by making various changes to the Bitcoin protocol.

Pros: First cryptocurrency to enter the market; largest market cap and highest transaction volume; fully decentralized; strong development team in Bitcoin Core with over 500 contributors; limited supply; considered a store of value and can be exchanged for altcoins; bitcoin is an acceptable form of payment at many retailers and has been considered a legally-recognized currency in some countries

Cons: Slow transaction times (has reached ~1-3 hours); high transaction fees (has reached ~$20-30 per transaction); vulnerable to a 51% attack if a mining pool or anyone else controls over 50% of the mining power

Analysis

To perform an objective analysis, each cryptocurrency is rated based on the following factors: (1) validation method; (2) leadership; (3) community participation in development; (4) transaction volume and market capitalization; (5) industry participation; (6) security; (7) usability; (8) technical features; (9) growth; (10) legal risks; and (11) estimated time of arrival.

Validation Method

Bitcoin uses a proof-of-work (POW) system to validate transactions. This requires validators known as miners to solve a cryptographic riddle which is difficult to compute but easy for others to verify.[2] This process may require a lot of trial and error before a valid proof of work is generated. The miner who generates the proof of work adds the next block to the chain and receives a block reward as well as a transaction fee. Solving the cryptographic riddle requires a significant amount of computing power, and miners typically purchase expensive hardware that is operating 24/7 to generate adequate returns. [3]  Therefore, mining requires a large amount of computing resources and electricity. Additionally, a POW system is vulnerable to a 51% attack, where a single miner or mining pool (made up of several miners working together who split the rewards) has more than half of the mining power of the network. As a result, the miner can refuse to validate transactions and can double-spend bitcoins.[4] However, the likelihood of a 51% attack is low, because this would devalue the currency that the miners are working to obtain.

Leadership/Community Participation

Unfortunately, the creator of Bitcoin is unknown and simply goes by the pseudonym, Satoshi Nakomoto. The Bitcoin Core development team is led by Wladimir van der Laan and includes over 500 members who are actively improving the functionality of the network.[5] Software updates are added on Github on a regular basis.

Transaction Volume and Market Capitalization

Being the industry leader, Bitcoin has the largest market cap (~$180B) and transaction volume (~$13B in transactions per day). Nonetheless, being the leader in transaction volume has led to long confirmation times and large fees. Lightning Labs[6] is currently working on a Lightning Network to address its scalability problem by processing millions of transactions per second off-blockchain which will also reduce fees considerably. Unfortunately, the Lightning Network is still in the development phase and it is unclear when it will be added to Bitcoin Core.

Industry Participation

Bitcoin has gained acceptance at many retailers, such as Expedia, Microsoft, Overstock.com, and even Subway in select locations.[7] Additionally, Bitcoin can be purchased through several exchanges, such as Coinbase, Bitstamp, Bitfinex, and many others. Moreover, Bitcoin futures trading is also available on major financial exchanges including CBOE and the Chicago Mercantile Exchange. Still, Bitcoin has not yet received widespread acceptance and is limited in where it may be used.

Security

The immutable, decentralized network has been considered more secure than traditional banking systems, where account information for a large number of users is stored at a centralized location.[8] In a traditional banking system, if a hacker gains access to the server where this information is stored, the hacker can obtain information from thousands of users at once. By contrast, in Bitcoin’s decentralized protocol, a hacker can only gain access to individual wallets and cannot breach the security of multiple users at the same time.[9] Bitcoin also does not require users to trust those who maintain the network, because every transaction is published on its public blockchain. On the other hand, as mentioned above, Bitcoin is vulnerable to a 51% attack even though the likelihood of that is low.

 Usability

Bitcoin has several uses as a store of value (digital gold), a means for transacting in alternative cryptocurrencies, and a form of payment. Even though some countries have accepted Bitcoin as legal tender, most all have not, and some have gone so far as to make it illegal to transact in Bitcoin.[10] Furthermore, several retailers are hesitant to accept Bitcoin and it is only accepted as a form of payment at a small subset of stores. Additionally, the large transaction fees seem to be scaring users away from making small payments with Bitcoin, and many prefer to hodl (i.e., hold) while transacting in other forms of cryptocurrency.

Technical Features

As the first in its field, Bitcoin shares similar technical features with many of the altcoins: decentralization, immutability, and transactions validated by miners in a POW system broadcasted to the network on a public blockchain. Unknown to many, Bitcoin also has the ability to execute smart contracts, although in a limited form. Further developments may include the addition of the Lightning Network to increase transaction speed and reduce fees, and an improved developer environment for writing smart contracts.

Growth/Legal Risks

As the coin with the largest market cap, many are concerned that Bitcoin does not have much room to grow. Nevertheless, Bitcoin is estimated to have a user base on the order of 1-10 million.[11] If Bitcoin does become digital gold and/or a global currency, the user base can grow to the hundreds of millions or even a billion. Additionally, there is a limited supply of 21 million bitcoins. As of January 2018, about 16.8 million bitcoins have been mined[12] and the value of Bitcoin should increase as the number of bitcoins left to mine decreases. Although Bitcoin has been outlawed in some countries, the more prevalent it becomes the more likely those countries are to remove such bans.

Estimated Time of Arrival

Unlike many altcoins, Bitcoin has arrived and has been widely used for the last few years. While other players in this space created tokens before fully developing their respective platforms, Bitcoin is currently functional.

ETA: Now 

Conclusion

Even though Bitcoin may no longer be the hidden gem it once was, the future is still bright for the industry leader in cryptocurrency. With a growing user base and the development of the Lightning Network, Bitcoin remains a good value.

[1] https://www.cnbc.com/2017/11/29/bitcoin-could-easily-reach-the-100000-range-strategist-tom-lee.html

[2] https://en.wikipedia.org/wiki/Proof-of-work_system

[3] https://www.bitcoinmining.com/what-is-the-bitcoin-block-reward/

[4] https://learncryptography.com/cryptocurrency/51-attack

[5] https://en.bitcoin.it/wiki/Wladimir_van_der_Laan

[6] https://lightning.engineering

[7] http://www.businessinsider.com/bitcoin-price-8-surprising-places-where-you-can-use-2017-10

[8] https://bitcoin.org/bitcoin.pdf

[9] https://bitcoin.org/bitcoin.pdf

[10] https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory

[11] https://steemit.com/bitcoin/@jimmco/how-many-people-touched-bitcoin-up-to-2017-and-what-is-current-adoption

[12] https://blockchain.info/charts/total-bitcoins

Introduction

Hi everyone and welcome to my blog! My aspirations for this site are to be the plain language Wikipedia for cryptocurrencies. In other words, the site will provide a brief explanation and a fair and objective analysis of the wide variety of cryptocurrencies out there. Each post will be about a different cryptocurrency and includes a short introduction, and an explanation of the pros and cons of the coin.

For those of you who don’t care to know about all of the details, feel free to stop there and this may give you a rough idea of the purpose of each coin and its advantages and disadvantages. If on the other hand, you want more information, I’m including a detailed analysis below the pros and cons that describes the validation method, the technical features of the cryptocurrency, its use cases, and much more.

Any and all comments are welcome and I hope this will become a platform for comparing and contrasting the roughly 1500 cryptocurrencies currently in existence. Thanks and please let me know if you have any questions or comments.

Cameron

INTRODUCTION PART 2

While cryptocurrency and the underlying blockchain technology is an exciting field with vast potential, most message boards and fan sites seem to praise each altcoin and project massive growth without providing a detailed technical or long-term analysis of the coin’s prospects.  The goal of this site is to provide explanations of the problems each coin solves, its improvements over existing technologies, and how each coin effectively uses decentralization to further its purpose.  This site is meant to provide an objective, detailed analysis of each cryptocurrency, and be an open forum to scrutinize and point out the advantages as well as the disadvantages of several coins.

Cryptocurrencies may be reviewed based on several categories, including: the underlying problem that the coin seeks to solve, the quality of the leadership, how far along the project is in development, the number of users participating in the network, whether the coin uses proof of work, proof of stake, or an alternative validation system, the extent to which the coin is decentralized, etc.  Hopefully, readers will walk away from this site with a better understanding of how each altcoin fits into the cryptocurrency field and can get involved in the coins they like most.