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7 Bitcoin Alternatives

This is a follow-up piece to part 1, in which we discussed some of the technical limitations of the Bitcoin blockchain implementation. Today I’m going to give a brief introduction to seven[1] alternative cryptocurrencies. I will start with four strongly performing currencies which aim to address some of the issues in Bitcoin. Then I’ll introduce three more amusing alternatives.

Ripple (XRP)

Ripple was released as a cryptocurrency in 2012 and has now reached a market cap of $64billion (I lose track, that’s what it was when I wrote this). It is both a cryptocurrency (XRP) and a digital payment network. It is focussed on replacing traditional banking systems and offers an exchange for banks to use (it already has over 90 banks and the Federal Reserve as partners). It is faster than bitcoin (as it has no mining) taking around 5 seconds for a transaction (rather than 4-5 days for a wire transfer in the legacy system).

Ethereum (ETH)

Ethereum runs smart contracts rather than a currency. I.e. it facilitates the transfer of ETH if certain conditions are met. Ethereum uses Ether as the native token. It aims to eliminate third parties in industries. Ether currently has a market capitalisation of $120billion, not bad for starting out in 2015! Many users prefer Ethereum to Bitcoin as it integrates a Turing complete programming language – significantly expanding the scope of applications.

Monero (XMR)

Monero combats the pseudoanonimity issues of Bitcoin by offering a truly secure, private and untraceable currency with only selective transparency. Monero protects privacy in three ways[2]: (1) Ring Signatures (blends senders’ address with other groups’ addresses), Ring CT (hides transaction amount) and Stealth Addresses (hides receiver address). Another feature is that coins are fungible – you can switch one coin for another as they don’t store the past transactions. Notably this also reduces the space monero takes up and increases transaction speeds. Monero currently has a market cap of $6billion.

LiteCoin (LTC)

This is a fork off the Bitcoin ledger (from 2011). This is a faster and lighter version of Bitcoin  – i.e. it takes 2.5 minutes for a transaction rather than 10mins. It is capped at 84 million coins – so theoretically worth about ¼ as much as Bitcoin and currently trading at a $12billion market cap – however obviously both valuations depend on usability.

Useless Ethereum token (UET)

Possibly my favourite cryptocurrency – it’s blatantly honest. The description on the website is:

“You’re going to give some random person on the internet money, and they’re going to take it and go buy stuff with it. Probably electronics, to be honest. Maybe even a big-screen television. Seriously, don’t buy these tokens.”

However crowdsale statistics shows that $383million worth has already been contributed:

Screen Shot 2018-01-22 at 11.13.14 am

Dentacoin (DCN)

Again, the description on the website says it all: “Dentacoin is the first Blockchain concept designed for the Global Dental Industry. The Dentacoin ERC20 token is configured to be used globally by all individuals.” DCN currently comes to a market cap of $630million

Trumpcoin (TRUMP)

If you want to take your political views to an extreme – make cryptocurrency great again with Trumpcoin, it has already got a market cap of $2million. “TrumpCoin is a digital currency that is based on Bitcoin. It was created on February 20, 2016, in order to honor Donald J. Trump and to help him secure the Presidency of the United States.”

With the many ICOs hitting the market, these are just the tip of the iceberg. Personally I found these seven interesting for their own unique reasons. Please note that this blog has not been written with the intent to be investment advice. I’m also sure by the time you are reading this the market caps would have materially changed several times.

If you would like to read Part 1 of this blog please click here.

View More Articles By The Montgomery Team

Roger Montgomery is the Chief Investment Officer of Montgomery Investment Management, montinvest.com, and author of blog.rogermontgomery.com.

Roger's step-by-step guide to valuing the best stocks and buying them for less than they're worth, Value.able, is available exclusively at rogermontgomery.com. Skaffold is an online stock-picking application that rates ASX-listed stocks from A1 to C5. Watch a demo of Skaffold at www.skaffold.com.



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