Without doubt, Bitcoin is the most recognized and popular digital currency today; and with its value rising from less than $20 in January to almost $1,200 in December, it is for sure that it will only attract more hype and attention in the coming years. But unknown to many, there are still other crypto-currencies that are vying for relevancy, and just like Bitcoin, it does not physically exist and is also mined through solving complex mathematical algorithms.
This perhaps is the second most popular e-currency next to bitcoin and has seen a staggering rise in value in the recent months. Litecoin is based on the Bitcoin protocol but requires lesser computing power to mine. Unlike Bitcoin which requires ASIC to mine, Litecoin can be mined efficiently by using standard computers because its algorithm designed by Dr. Colin Percival secures backup service for Linux and other open source OS.
This is also another offshoot from Bitcoin and acts as a decentralized DNS—the Internet protocol that turns human-comprehensible website names into addresses understandable by machines. It is decentralized because it is outside the governance of the Internet Corporation for Assigned Names and Numbers by acting as its own DNS.
Another offshoot of Bitcoin but with higher efficiency of mining, Peercoin has improved security and safeguard against abuses of pool mining. Peercoin has the fourth largest market cap among alternative digital currencies.
Unlike Bitcoin, Primecoin runs on a different mathematical algorithm. Primecoin uses the Cunningham chains instead of the “hashcash”—the algorithm used in mining Bitcoin. The Cunningham algorithm is a sequence of prime numbers named after mathematician AJC Cunningham.
Bitcoin’s difficulty level increases with every 2016 blocks solved, but with Primecoin, its difficulty slightly increases after every new coin is created.
This was announced in April 2013 and is actually based on Litecoin. However, Feathercoin adjusts its difficulty more often than Litecoin. And unlike most digital currencies, it updates regularly to add more features and enhancements such as security against abuse and forking by group mining.
Novacoin’s difference against other digital currencies is that it integrates protection systems within its core, which deters abuse by pool miners. This e-currency has a technical cap of 2bn coins which is far greater than the number of other alternative coins. But Novacoin has a risk for inflation because its cap can be increased.
Another Litecoin spin-off, Infinitecoin was announced in June of 2013. Its difference from other alternative coins is that it has more frequent difficulty adjustment rates during mining and its market is 1142.86 times as Litecoin.
This one is still in its infancy and is limited to 42 million. At present, it is valued at $0.50; however, because of its aggressive branding, it might reach or even surpass Bitcoin’s price value today.
This is perhaps the most secured digital currency today because it has nine separate rounds of encryption using six different algorithms.
Aside from these nine alternatives, don’t forget that there are still other crypto-currencies, but currently, nothing beats the buzz and value of Bitcoin yet.