Today, Bitcoin and Ethereum are the two most dominant players in the cryptocurrency industry.
They are currently the largest and most successful examples of the revolutionary new concept of virtual cash.
I touched briefly upon the creation and rise of cryptocurrencies, focusing on Bitcoin and Ethereum, in a previous Pro Trader Today article, “Mining for Virtual Gold: Bitcoin and Ethereum.”
Bitcoin remains in the number one spot with a market cap of over $40 billion and over 16 million BTC in circulating supply.
Ethereum follows suit in second place with a market cap of over $17 billion and over 91 million ETH in circulating supply.
Following the prosperity of their predecessors, many alternative cryptocurrencies, called “altcoins,” have flooded the market, also seeking success.
Since 2008, following Bitcoin’s inception, over 700 different altcoins have been introduced to the market.
Many of them operate with a small market capitalization, volumes, and circulation.
The following cryptocurrencies, which we will discuss in depth, have the potential to grow into profitable and secure alternatives to the original giants:
Ethereum Classic (ETC)
Ethereum Classic is the product of an unusual phenomenon that occurred at block 1,920,000 on the Ethereum blockchain.
On July 20, 2016, the blockchain split into two independent agencies as a result of what experts call the “hard fork” from a serious hack in the Decentralized Autonomous Organization (DAO).
On June 28, 2016, the attacker managed to drain more than 3.6 million Ether into a “child DAO” that has the same structure as the DAO, resulting in a serious price drop.
From that moment on, they have worked completely independently of each other, despite their similarities.
Ethereum Classic offers many of the same features as Ethereum, such as creation and deployment of smart contracts and decentralized applications.
ETC even has all the same specifications as its predecessor, such as average block time, size, and reward.
It’s a comfortable option for those who are familiar with the original giants, Bitcoin and Ethereum, but wish to diversify their virtual wallets.
It makes for a good jumping off point.
Infinitecoin (IFC)
Infinitecoin is considered the penny of the e-coin world.
Created in June of 2013, Infinitecoin is an open network, peer-to-peer, script proof-of-work altcoin similar to Litecoin.
However, IFC has over 1,000 times as many coins in circulation as Litecoin.
Similar to Bitcoin and Ethereum, the cryptography and decentralized nature of IFC is key to its success.
It’s the reason that no one can double spend, counterfeit, or steal IFCs.
Infinitecoin remains a viable monetary system for both current and future users. So, the people behind IFC vow to maintain, improve, and legally protect the integrity of the protocol to ensure this.
The IFC network is configured so no one central point is in control, but it is controlled by the entire mining community, checking each other’s work to make sure no one is corrupting the blockchain, providing intrinsic security for the network.
What sets IFC apart from other cryptocurrencies is that it has one of the largest coin counts, totaling 90,600,000,000 post-mining. and it will be one of the first to be completely mined out.
Their global distribution, rapid transaction times, and large circulation volume — that beats out some of the top-five coins on the market — gives Infinitecoin an edge.
The distribution of IFC is one of the reasons it remains so strong, but the imminent mined-out future is also important.
The likelihood of any of us seeing the mined-out future of Bitcoin and many other coins is slim, and it’s already becoming apparent that the small volume of Bitcoins will force it to be priced out of reach for the average consumer in the near future.
Infinitecoin is well within reach of the average consumer’s budget.
Since nearly all the Infinitecoins have already been mined, buying them on the open market seems to be the best bet.
But this also makes them slightly more difficult to acquire compared to Bitcoins and Litecoins.
Currently, IFC is used to purchase small items, hence why it’s typically sold in large numbers like 1,000,000.
If more people started using Infinitecoins for small purchases, its demand could skyrocket.
With its current market strength and impending mined-out future, it could be a safe bet for those who opt out of Bitcoin and Ethereum.
Infinitecoin also has the potential to completely overthrow Bitcoin as the number one e-coin for small purchases, which would increase its already large global market.
Getting in early on Infinitecoin, while you still can, would definitely be a smart move.
Zcash (ZEC)
Zcash is also similar to Bitcoin and Ethereum in that it also has a decentralized blockchain, which allows for a certain amount of anonymity behind its transactions. But ZEC takes its encryption to a much higher level.
With Bitcoin, if you know someone’s address, it’s easy to see how much money is moving around.
With Zcash, all this information is encrypted.
It was recently launched in October 2016.
The code is open source, which is unusual in the crypto world.
The company, founded by CEO Zooko Wilcox-O’Hearn, a 41-year-old cryptographer, is expected to use 10% of the coins for funding costs and give 1% to nonprofit organizations — a nice added bonus.
The total coin supply will mimic Bitcoin’s, 21 million in all.
Zcash defines itself as “if Bitcoin is like http for money, Zcash is https.”
So, it seems very promising, offering privacy and selective transparency of transactions.
Just like https, Zcash claims to provide extra security and privacy in recording all its transactions on the blockchain, as well as senders, recipients, and transaction amounts.
Wilcox-O’Hearn tells Investopedia:
Zcash is a new blockchain and cryptocurrency which allows private transactions (and generally private data) in a public blockchain. This allows businesses, consumers, and new apps to control who gets to see the details of their transactions, even while using a global, permission-less blockchain.
Zcash goes beyond the proof-of-work model and embraces a proof-of-construction method.
Zcash offers its users the choice of “shielded” transactions, which allows for content to be encrypted using an advanced cryptographic technique or a zero-knowledge proof construction called zk-SNARK.
zk-SNARK allows the network to maintain an extremely secure ledger of balances without displacing the parties or amounts involved with each transaction.
It also ensures the validity of each transaction, as well as having a secure ledger of balances without having to disclose any additional information.
Thus, Zcash offers additional features that Bitcoin does not, while still ensuring that nobody is cheating or stealing.
The Bottom Line
The following is just a collection of data for your consideration, as of May 25, 2016:
Bitcoin (BTC)
- Market Cap: $41,441,856,946
- Price: $2,471.49
- Circulating Supply: 16,351,212 BTC
- Maximum Supply: 21,000,000 BTC
- Volume (24 hrs.): $2,558,950,000
- Percent Change (24 hrs.): +1.57
- Percent Change (7 days): +31.30
Ethereum (ETH)
- Market Cap: $17,101,064,489
- Price: $186.04
- Circulating Supply: 91,918,968 ETH
- Volume (24 hrs.): $988,380,000
- Percent Change (24 hrs.): -2.97
- Percent Change (7 days): +94.57
Ethereum Classic (ETC)
- Market Cap: $1,661,929,337
- Price: $18.07
- Circulating Supply: 91,968,686 ETC
- Volume (24 hrs.): $528,778,000
- Percent Change (24 hrs.): +8.30
- Percent Change (7 days): +179.54
Infinitecoin (IFC)
- Market Cap: $20,430,638
- Price: $0.00226
- Circulating Supply: 90,596,274,910 IFC
- Maximum Supply: 21,000,000 IFC
- Volume (24 hrs.): $7,264,930
- Percent Change (24 hrs.): -14.91
- Percent Change (7 days): +464.77
Zcash (ZEC)
- Market Cap: $321,198,198
- Price: $232.78
- Circulating Supply: 1,379,806 ZEC
- Volume (24 hrs.): $50,776,100
- Percent Change (24 hrs.): -8.87
- Percent Change (7 days): +148.63
Ethereum Classic, Infinitecoin, and Zcash all contain properties similar to the current top-two cryptocurrencies, providing sturdy foundations for the newcomers.
Their differences are setting them up for success, as well.
They could easily overthrow the current leaders and become tomorrow’s top cryptocurrencies.
That’s all for now.
Until next time.
John Peterson
Pro Trader Today