Pinterest Stumbleupon Whatsapp
Ads by Google

Bitcoin was here first, but the open-source code meant copying it was easy. Litecoins are now established as being the silver to Bitcoins gold, but there are literally hundreds of other copycat “alt coins”. Not all crypto-currencies are equal though: here are 3 that I believe will have a future.

While you’re at it – read my guide on getting started with Litecoin mining A Full Guide To Getting Started With Mining Litecoin A Full Guide To Getting Started With Mining Litecoin Read More , while you still can. If you don’t understand the concept of Bitcoin yet – and I wouldn’t fault you for that – then this video is the best explanation I’ve found yet:

We have a free eBook telling you all about BitCoin too.

Dogecoin

Technically speaking, Doge is nothing unique. It’s a standard copy-paste and tweak of Litecoin with a greater number of coins and a joke comic sans font on the interface. It grew out of love for the doge meme, a Japanese Shiba dog who greeted the world with innocent eyes and typically appalling grammar, as is the case with animals on the Internet.

Ads by Google

And yet, the community embraced the coin like no other. r/dogecoin is welcoming and relaxed: a far cry from both the hostile and noob-intolerant Bitcoin communities. The welcoming “just have a go” attitude meant some people were joining the revolution by mining a few coins a day on their mobiles. It doesn’t matter that the coin is basically worthless at the moment: it’s a way of getting into the crypocurrency revolution without feeling stupid. The coins are so easy to get and there’s so many of them that it feels good to have even a few hundred!

The rise of the doge “tipbot” quickly led to it being named the Internet tipping currency of choice; there are hopes that websites will adopt dogecoin as a micro transaction for thanking authors. There’s also the huge sense of charity: most recently, the dogecoin community raised $25,000 to help send the Jamaican bobbled team to the winter olympics in Sochi. Seriously.

by Reddit user wolfinsheeps by Reddit user wolfinsheeps

Perhaps it’s the low value of the coins that makes people so happy to part with them, but it’s clear that dogecoin has the potential to be the currency of choice for gifting – and that might just be exactly the currency that the Internet is looking for. To the moon, fellow shibes!

Peercoin

Currently sitting at 3rd place in terms of market-cap, Peercoin is named after it’s secondary peer-based mining system. Peercoin is unique in that graphics card or ASIC mining will gradually give way: the network will sustain itself through the clients that use it. This is important for long term sustainability: the power consumption of crytocurrencies in general is insane. It’s a concept called “proof of stake” (as opposed to “proof of work”, the traditional model use in Bitcoin).

peercoin

The basic idea is that anyone who holds Peercoin will get an automatic return on those coins: hold them for longer, and get more – a bit like a savings account. Proof of Stake is programmed to give a 1% annual reward. This should ensure both the continuation of the network, and a guaranteed inflation – a mild inflationary rate generally considered to be good for an economy. The total number of Peercoins in circulation is infinite, but unlike other models the transaction fee (currently a fixed 0.1 PPC) is destroyed – it doesn’t go to miners. In essence: save the coins, and you get inflation; spend, and you get deflation; with inflation comes increased desire to spend – so equilibrium is reached. That said, I’m no economist.

The Proof of Stake system also helps to protect against the so-called “51% attack”. With Bitcoin, or most other crypto-currencies, once a single person controls 51% or more of the computational mining power, they are able to break the system by double spending or ignoring transactions – they would control the money supply, essentially. When the Proof of Stake system is fully in place, an attack would only be possible by owning 51% of all the Peercoins in circulation, which is highly improbable.

Primecoin

Created by Sunny King – who also made Peercoin – Primecoin is one of a few CPU-only coins. Bitcoin and its derivatives use SHA256 algorithm; there are now intensely powerful ASIC miners which make graphics card mining completely inefficient for that job. Litecoin and its derivatives use Scrypt – a more memory intensive algorithm, which restricts it to graphics cards and at of the time of writing, makes it ASIC-proof. Memory intensive is the crucial point here: memory costs a lot. An ASIC designed for Scrypt-based coins wouldn’t be much different to a graphics card, only more energy efficient. Unlike Bitcoin which was suddenly eclipsed by cheap USB ASICs, Scrypt derivatives will continue to be viable on GPUs for a long time after any theoretical ASIC is released. It would also be very easy to increase the memory requirements for Scrypt coins with a single code tweak, killing off any ASICs already made instantly.

Primecoin however uses a CPU to discovering special chains of prime number sequences, which are apparently of scientific importance. I won’t embarrass myself by pretending to understand exactly why, but it’s good to know that some scientific value can come from the coin, and miners aren’t simply wasting hashes for the sake of it.

primecoin

The other defining factor is a more evenly spread difficulty increase, but its main attraction is being CPU-only: you can mine Primecoins at the same time as using your GPU for another coin, and everyone with a computer has a CPU.

You may think crypto currencies are a huge scam with no real value, but it doesn’t really matter: Value is determined by those who use it. The only reason you think your dollar note has a value is because everyone else does too. The more people that believe in a currency, the greater its value – and that’s why I believe in these.

Anyway – I’m waiting for a coin that helps cure cancer. How about you?

  1. Lu Mace
    January 29, 2014 at 7:12 pm

    The Zen is worthy of serious consideration. Unlike Bitcoin or similar crypto-currencies, there's no chance of a Zen speculative bubble. It's linked too 22 worldwide major currencies, and this makes it extremely stable. In addition it's underpinned by a crowdfunded social network; Zurker.com.
    This means that the Zen has the potential to eliminate transaction costs and become a worldwide digital currency and avoid the electronic mining costs and volatility associated with Bitcoin.

  2. Jason
    January 29, 2014 at 6:17 pm

    I am a Gridcoin miner and so far I am very happy with how Gridcoin is going. So far the Gridcoin team of miners has contributed 9 + million points on various science projects in the Boinc system.

    Boinc stats: http://boincstats.com/signature/-1/team/118094994/sig.png

    If there is one cryptocoin that can change the world, it is Gridcon. Imagine if even a portion of all the miners on all the other crypto coins decide to mine Gridcoin and contribute to their favorite Boinc projects. We can see some serious contributions to pretty much all scientific fields.

    • Adam
      February 25, 2014 at 8:32 pm

      Gridcoin doesn't have a website that functions correctly and if you think 9million points on Boinc is a lot then you obviously dont appreciate its size and the value of other teams input. I have been using my computers on Boinc with Ripple Labs and getting XRP each day. So far I have contributed 1.1million points - which is not very much considering the Ripple team has done 32,939,863,407 points. I'm surprised Ripple wasn't mentioned in this article, go here if you want to find out more;
      https://www.computingforgood.org/

  3. LennStar
    January 29, 2014 at 6:10 pm

    Gridcoin also allows (since a week) CPU-Mining.
    But thats not "using CPU for blockchain". CPU-Mining in Gridcoin is... counting your BOINC credits basically :D
    Only 5 projects at the moment, but this will increase. Gridcoin already has lots of advantages and will have more in the future.

    Profitable coin? At the moment you get more for the GRC then it costs on energy (even in germany, where I pay 27€cent per KwH)
    Exchanges: Since the first Linux Client is just 3 days old and so much in the coin changes and will change, it is in english only online at a very new exchange. But the chinese trade GRC since weeks- dont ask me about their exchanges.

    current GPU hash: NetworkHashPs: 111'925'536.00000
    and CPU-Miners: 371

  4. Anon
    January 29, 2014 at 5:32 pm

    Hey James,

    Gridcoin just got on its first exchange! It's a new one called c-cex.com.

  5. Lu Mace
    January 29, 2014 at 12:30 pm

    Well, I use to buy ZEN at zurker.com or other ZEN agents https://www.preferzen.com/
    Just now with ZEN you can buy "vShare" at zurker.com social media. Welcome!

    • James B
      January 29, 2014 at 3:06 pm

      Please tell us why exactly you think "zen" is worthwhile...

  6. Kevin
    January 29, 2014 at 4:14 am

    Speaking of a coin that helps cure cancer: Gridcoin is starting to gain more popularity that uses BOINC(seti@home, rosetta@home, world community grid and other sciency stuff). It's based on scrypt, but instead of just regular mining (5grc per block), when you run the BOINC client you mine significantly more coins (up to 150grc, depending on processor utilization for BOINC). It's starting to gain more and more traction and is shaping up to be a very nice coin with a lot of real world potential. Instead of just "wasting" processing power on the coin, you are helping the world. gridcoin.us

    • James B
      January 29, 2014 at 9:21 am

      Thanks Kevin, that sounds perfect. Is the coin profitable right now, or even on any exchanges?

    • Kevin
      January 29, 2014 at 5:08 pm

      It's on a couple right now. It's on a chinese exchange and just got added to c-cex.com (a new exchange). And yes, it's profitable. It's trading at about $.06 to .00012btc($.09), which I THINK (using my very guestimation calculations) comes out to about $60 a day revenue. The difficulty is around 5 with a block reward of up to 150grc, trading at over $.06

    • Mathew Hamilton
      January 30, 2014 at 2:16 am

      +1 for gridcoin, a very underlooked coin atm.

Leave a Reply

Your email address will not be published. Required fields are marked *