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In Bitcoin, there is much discussion about alt-coins, as if many of these are actually legitimate. Many alt-coins are pre-mined, causing them to lose much of their legitimacy. If a coin has been pre-mined, it should automatically be crossed off your digital currency investment list.

Further, many quite simply don’t have the adoption rate to offer any sort of liquidity or security. Still, amateur alt-coins are part of the space, and there are more all the time. They’re also a point of contention for many critics of crypto-currency generally, who point towards how easy it is to create a crypto-currency these days. Of course, it wasn’t so easy until Bitcoin demonstrated the model.

From the years 2013-2015, the three largest cryptocurrencies have remained steady: they are, Bitcoin, Ethereum, Ripple and Litecoin, respectively.

Bitcoin is well-publicized, but other options not so much.

A major switch happened in 2014 as Ripple overtook Litecoin for second largest alt-coin in the market. As of December 2015, Ripple stands at a market cap of $211,089,007. Litecoin’s is $151,006, 662. Bitcoin’s is $6,596, 631,791.


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Below these top three spots, there is a lot of turnover. The steady options over the past two years have been Dogecoin, Bitshares, Stellar and Maidsafe coin below the top three alt-coins.

2. Ethereum

 The most publicized of the Bitcoin 2.0 technologies, Ethereum has had an appreciable price increase YTD perhaps thanks to questions surrounding the block size limit in Bitcoin and rendering it the second largest alternative digital currency.

Ethereum

The currency raised nearly $20 million in order to ensure the project would get off the ground, and many people believe that Ethereum can achieve what Bitcoin cannot.

Ethereum3. Ripple

Ripple is different than Litecoin and Bitcoin. For one, its pre-mined, meaning its not a very good option for an investor, not to mention its lost more than 90% of its market cap over the past two years.

Good Ripple image

 

Ripple considers itself a  “real-time gross settlement system”, and functions as a currency exchange and remittance network run by a private company, Ripple. The Ripple Protocol is a distributed open-source protocol with its own currency, called XRP or ripples. It’s likely that Ripple has served as a source of inspiration for many of the private financial institutions looking into Bitcoin.

RippleChart

Ripple All-Time Chart

In recent years, Ripple has turned its focus away from the crypto-currency movement to focus on the banking market perhaps symbolic of the synergy between the financial industry and the Ripple model.  Indeed, American Banker once wrote that “from [a] banks’ perspective, distributed ledgers like the Ripple system have a number of advantages over cryptocurrencies like bitcoin.”

4. Litecoin

Litecoin is the well-known crypto-currency designed by Charles Lee, who now works as Director of Engineering at Coinbase. This peer-to-peer internet currency is very much like Bitcoin from the user standpoint.

litecoin

Open-source and global, Litecoin, like Bitcoin, is also fully decentralized, with mathematics securing the network. Some people point to Litecoin’s faster transaction times as an improvement over Bitcoin.

LitecoinChart

Litecoin is one of the most proven crypto-currency experiments on the market and its proof-of-work algorithm uses scrypt, a different form of encryption, than Bitcoin. Charlie Lee envisaged the system as  silver to Bitcoin’s gold analogy. He also foresaw that there might be a time when the Bitcoin network could not handle itself as a transaction network after a certain volume, and believed Litecoin could handle the spillover if Bitcoin every reached capacity.

In summation

I’m no expert on trading cryptocurrencies, as some are, but, unless you’re an expert, it’s probably best to stay focused on Bitcoin. Until one feels comfortable about the nuances of each crypto-currency, there’s no reason to explore other options, although Litecoin could be a smart, inexpensive speculative play, just don’t invest more than you’re ready to lose. Once one does, even then, that doesn’t mean Litecoin and Ripple – or any other options – are a good choice for you.

Images from Shutterstock, Ethereum, Ripple. Charts from CoinMarketCap.

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Posted by Justin OConnell

Justin is the founder of GoldSilverBitcoin . His work has appeared in VICE, MERRYJANE, Bitcoin Magazine and elsewhere. If you appreciate this piece, please consider a tip: 1MjJ4NBi3ALFitNKpWgoWQmugH7czEdSNV

11 Comments

  1. Money Trends 11/05/2016 at 15:44

    Learn a little more about the history of digital currencies in this video
    https://www.youtube.com/watch?v=Cod7U9IIz5U

  2. Yes, I trade for a living too. I’ve made triple figures of btc this year so far. I have shorted dash, I even took a long in ripple. This article talks about ‘investing’ though… If you want to invest then great, but don’t buy dash or ripple, whatever your goals are they must involve making money i the long-term and neither fo these coins will achieve that goal for you. Meh listen or don’t, I just had to jump in when I heard Dash and Ripple being touted as good investments… most people have no idea how or why different coins might become a success. The banking system is not going to make you rich as a crypto enthusiast. Bankers are too smart and too greedy for that ;).

  3. I agree Valentino – Dash is very, very groovy. But then again – so is Ethereum!

  4. Well I hear your primal cry Jabba and I’m still sorry that you didn’t get to keep Princess Leia. I know you never really got over that and I wish there was something I could do to help console you. Do you like pizza?
    Anyway, a lot of people trade these alt or sh*tcoins as you call them and make a decent daily profit doing so.
    For example, over the past 2 weeks I made about $400 in BTC just trading Ethereum. I’ve made BTC trading Dash, Ripple and many others. Of course mostly I’ve missed out on WHEN to sell to maximize my profits, but that’s water under the bridge and not a loss, just a profit not realized. Almost hurts as bad but not quite.

    If I were just a few notches smarter, I would be completely out of debt. Add a few more notches and I would be a bitcoin millionaire. Alas I am not. Still working on it. Bottom line is this – there are a number or reasons or buying and selling cryptocurrencies and not everyone has the same goals – obviously right? Some want to just trade. Some want to save. Some want to save the world. Some want to control other people. Some want to help set other people free and on and on.

  5. The Ripple protocol is the value. XRP are just tokens used for transactions. It’s really nothing like Bitcoin except that computers are involved – and humans and electricity and value. Check out Episode #54 of my show. David Schwartz can tell you everything you’ve ever wanted to know about Ripple. Here:

    https://letstalkbitcoin.com/blog/post/bitcoins-and-gravy-54-david-schwartz-explains-ripple

    I’m not a follower or fan of Ripple, but I’m intelligent enough to see the value there. I also still use a real bank and have a mortgage company that I pay every month. A lot of what many of us do is counter to the way we would like to do things. A lot of us feel stuck. A lot of us trade what we know is good and righteous for what is convenient. Sigh.

    This is planet of the apes and the apes come in all colors. The way to spot the most dangerous ones is by what they wear and by their hair style. Be very careful around the light skinned ones who wear their hair short and parted on the side.
    Also be wary of the ones wearing suits and ties. They’ve been known to slaughter women and children for profit.

    : )

  6. This was a great article – for 4 year olds!
    Well done! Maybe next you could write an article on the best way to put on mittens or how to blow softly on your grilled cheese and tomato soup to avoid getting burned.

  7. flickerKuu you probably don’t know what you’re talking about if you put Dogecoin before Ethereum and Ripple. I don’t mean to be snarky, it just seems you have not been reading much in the way of tech.
    Bitcoin’s value comes from the tech, not some magical hope or “intrinsic” value.

  8. flickerKuu 24/02/2016 at 05:13

    RIpple and Etherium before Dogecoin? I see who wrote this “article”

  9. Everyone is going to have different opinions and I respect that. The fact you say don’t buy because they are pre-mined is not right. Mined coins get controlled by big miners making them more centralized than Ripple who adds validators that make it become more decentralized over time. Microsoft is running a validator as we speak and wants to run more. Buterin recently stated that 10 banks validating is better than a handful of miners and Ripple plans on having more than 10 validators. Ripple’s ability to trade currencies as IOUs through trust could be the solution to Bitcoin’s block size problem (less transactions trading ious and cashing out later). Eventually, I think your evaluation on “an investment” is true for short term traders because the best bridge currencies have low volatility but we are not even close to that stage. I promise you, you will see a big increase in the value of XRP before this occurs. Also read this recent news (today): http://www.coindesk.com/ripple-banks-42-percent-international-payments/

    Thank you for not putting Dash on the “radar” :) and Jabba needs to stop YELLING!

  10. Jesus, this is worse than the trading troll box. DO NOT buy Litecoin, DO NOT buy DASH, DO NOT buy Ripple! Not if you like money, profit, ROI etc.
    ‘When’ you buy is probably more important than ‘what’ you buy most of the time anyway.
    Safecoin (MAID) is the only one that’s going to become ubiquitous imo: it’s the only one you don’t need to buy or overcome barriers to getting into crypto. Just click 3 buttons to farm, bob’s your uncle you own some crypto and you personally have lots of uses for it (eternal, pay-once, safe decentralised storage, processing, webhosting etc etc).

    Do some proper research, don’t buy sh*tcoins (Dash, LTC, Ripple pmsl).

  11. Dash should be on your radar for the long term,just buy and hold(masternode’s)

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