Cryptocurrency rivals snap at Bitcoin's heels

New crypto kids on the block are whizzing past bitcoin with breathtaking profitability
New crypto kids on the block are whizzing past bitcoin with breathtaking profitability

Bitcoin may be the most famous cryptocurrency but, despite a dizzying rise, it's not the most lucrative one and far from alone in a universe that counts 1,400 rivals, and counting.

Dozens of crypto units see the light of day every week, as baffled financial experts look on, and while none can match Bitcoin's $200-billion euro ($242 bilion) market capitalisation, several have left the media darling's profitability in the dust.

In fact, bitcoin is not even in the top 10 of the crypto world's best performers.

Top of the heap is Ripple which posted a jaw-dropping 36,000 percent rise in 2017 and early this year broke through the 100-billion euro capitalisation mark, matching the value of blue-chip companies such as, say, global cosmetics giant L'Oreal.

"Its value shot up when a newspaper said that around 100 financial institutions were going to adopt their system," said Alexandre Stachtchenko, co-founder of specialist consulting group Blockchain Partners.

Using Ripple's technology framework, however, is not the same as adopting the currency itself, and so the Ripple's rise should be considered as "purely speculative", according to Alexandre David, founder of sector specialist Eureka Certification.

Others point out that Ripple's market penetration is paper-thin as only 15 people hold between 60 and 80 percent of existing Ripples, among them co-founder Chris Larsen.

They can't be best at everything

But it still got him a moment of fame when, according to Forbes magazine, Larsen briefly stole Facebook founder Mark Zuckerberg's spot as the fifth-wealthiest person in the US at the start of the year.

Ether is another rising star, based on the Ethereum protocol created in 2009 by a 19-year old programmer and seen by some specialists as a promising approach.

Around 40 virtual currencies have now gone past the billion-euro mark in terms of capitalisation, up from seven just six months ago. The Cardano cryptocurrency's combined value even hit 15 billion euros only three months after its creation.

In efforts to stand out from the crowd, virtual currency founders often concentrate on the security of their systems, such as Cardano, which has made a major selling point of its system's safety features.

Others work on connected devices so "machines understand each other and are able to send each other value units, money, without going through a person or centralised third party", Stachtchenko said.

Some, like Monero, focus on guaranteeing anonymity, and others on share and bond issues, or on speeding up the confirmation time for transactions, like Litecoin.

"It is impossible for a cryptocurrency to be the best at all the various tasks," said Stachtchenko said.

Meanwhile financiers, established banks and regulators keep issuing stern warnings to the investment community to stay clear of cryptocurrencies.

Legendary investor Warren Buffett said that cryptocurrencies would "come to a bad ending" and that he would never stake money on them.

The South Korean government said it was working on a bill to ban cryptocurrency trading, but then backtracked.

Analysts meanwhile predict that rollercoaster ride of is set to carry on.

"When Wall Street bonuses hit bank accounts on January 15, I imagine we'll see a crypto buying spree of epic proportions" said Meltem Demirors, director of the Digital Currency Group, which invests in crypto businesses.

Explore further

S. Korea govt sends bitcoin on rollercoaster ride

© 2018 AFP

Citation: Cryptocurrency rivals snap at Bitcoin's heels (2018, January 14) retrieved 20 September 2019 from
This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no part may be reproduced without the written permission. The content is provided for information purposes only.

Feedback to editors

User comments

Jan 14, 2018
"The South Korean government said it was working on a bill to ban cryptocurrency trading, but then backtracked."

Not exactly true.

One branch of the Korean government (Ministry of Justice) raided trading houses and acted as if it was going to shut them down...and another branch of the government (Ministry of Finance) came along afterward and said 'hey, that's a bunch of bullshit and it is not happening'.

I wonder if any insider trading went along for a ride in that dump and pump debacle of epic proportions. Gee, that would never happen! Nobody concocts perfect storms like that, no, not honest people....

About +$100 billion in funds was manipulated in that one.....and the after effects are still being felt.

Perfect storm? Perfect scam? Perfect Opportunity? Motive? Results? All the evidence is there and in Western courts..might be more than enough for a conviction.

Jan 14, 2018
What's needed is a crypto currency that translates and values any and all other crypto currencies at any given moment...

Jan 14, 2018
Ethereum, Zcash, Iota.

Jan 15, 2018
WG, are you talking about a function like Shapeshift and Changelly perform?

Jan 15, 2018
Looks like there are an awful lot of people with more resources than they can be productive with. Its unfortunate because there are a lot more people out there who could use this money to actually do work and be productive...but instead we see these assets being inflated in currency speculation looked at in terms of "investing" which has some analogous factors similar with Gold. . .

At this point, cryptocurrency is expensive monopoly money that disappears if there is wide spread EM disturbance such as unexpected massive solar flares or EMP weapons..I mean. Really. How do any of these currencies have existence outside of a circuit board?

My real question is, can I barrow these cryptocurriencies and keep the difference when I return them on their declining value the way I can take short speculative positions on standard stocks which tend to involve actual production?

Jan 15, 2018
How secure are these against quantum computers?
All this money getting stolen by someone could cause a crash worth potentially billions

Jan 16, 2018
BitCoin doesn't have to worry about other private cryptocurrencies competing with them. What they all have to worry about now are that national treasury cryptocurrencies and other cryptologic/blockchain financial devices that are already in the process of replacing them as real and more universally usable cryptocurrency. You know that you can actually buy stuff with efficiently in terms of time, cost and risks.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more