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What is Bitcoin Cash?

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Bitcoin Cash (BCC) is a cryptocurrency that offers scalability, flexibility, and lower fees compared to Bitcoin, its parent cryptocurrency.

Established on August 1, 2017 due to a hard fork in the Bitcoin blockchain, Bitcoin Cash has rapidly become one of the most popular and highly valued cryptocurrencies on the market. (1) (2)

Due to its similarities with Bitcoin and its improved transaction rate, Bitcoin Cash has been embraced by cryptocurrency enthusiasts as a reliable alternative to Bitcoin. Many vendors and business that accept Bitcoin have also begun accepting Bitcoin Cash, spurred by its faster transaction speeds and lower fees. (3)

Bitcoin Cash is an ideal cryptocurrency for users who value speed and efficiency above all else.

Overview

Bitcoin Cash was established on August 1, 2017 as the result of a hard fork in Bitcoin’s blockchain.

For years, Bitcoin users were divided on the issue of Bitcoin’s scalability and how to make the cryptocurrency accessible to more users.

Bitcoin’s block size limit, at only 1 MB per block, capped the number of transactions per day at 250,000. This design was implemented by Bitcoin’s developers at the beginning of its development with the intent of reducing spam transactions. (4) (5)

This resulted in increasingly long waits for transactions to complete, as more people and businesses began using Bitcoin. The block size limit has also led to a steep increase in the fees that people pay to speed up their transactions. (7) (8)

These problems lead to many vendors and users abandoning Bitcoin and moving to other cryptocurrencies, with Bitcoin’s share of the cryptocurrency market falling from 95 percent to 40 percent. (9)

Many Bitcoin enthusiasts have long advocated that the block size limit be increased, which would allow for more transactions per day and thus faster transactions overall. Supporters of a block size limit increase argued that it would increase Bitcoin’s appeal and make it possible for more businesses and consumers to start using the currency. (10)

However, due to the technical complexity that increasing the block size limit would entail, the change was never implemented, and the Bitcoin community was torn over how to proceed.

Opponents of a block size limit increase argued that increasing the block size limit would hurt miners and independent mining pools, centralizing power in the hands of the largest mining pools, which would go against the spirit of Bitcoin. Additionally, many opponents of the block size increase also argued that Bitcoin was not intended to be a popular currency and should remain a small, underground commodity. (11)

Ultimately, on August 1, 2017, the problem was solved when the ViaBTC Bitcoin mining pool produced a 1.9 MB BCC block that was not compatible on Bitcoin’s network, creating a hard fork that birthed Bitcoin Cash. (12)

Bitcoin Cash features a block size limit of 8 MB, which allows for two million transactions per day, meaning that transactions are much faster than on Bitcoin and fees are also much lower. Bitcoin Cash also features improved protections against replay attacks, a common problem when cryptocurrencies go through a hard fork. (13) (14)

Additionally, unlike Bitcoin, Bitcoin Cash is fully decentralized, with multiple independent teams working to develop and enhance it in the future. (15)

Many businesses and vendors who previously used Bitcoin have now begun using Bitcoin Cash as well, making it one of the most popular cryptocurrencies currently on the market, though it has not yet caught up to Bitcoin’s visibility or popularity. Anyone who owned Bitcoin at the time of the hard fork on August 1, 2017 automatically became owners of Bitcoin Cash as well. (16) (17)

Some Bitcoin purists are opposed to Bitcoin Cash and have begun referring to it as “Bcash” in an attempt to delegitimize it. (18)

Mining

Mining Bitcoin Cash is not as popular as mining Bitcoin due to the former’s relative newness.

Despite this, many Bitcoin miners have switched to mining Bitcoin Cash because of its rising popularity and the likelihood that it will become more profitable in the future. The larger block size limit is a major selling point for miners due to the fact that it allows them to earn more transaction fees more quickly compared to Bitcoin. (19) (20)

However, due to the fact that Bitcoin Cash is a fork of Bitcoin, mining it carries many of the same problems that Bitcoin mining does. Mining Bitcoin has increasingly become an expensive and arduous endeavor due to the blockchain’s size and complexity, which precludes people from mining it with CPUs or GPUs, requiring miners to purchase dedicated rigs. (21)

However, because Bitcoin and Bitcoin Cash use much of the same fundamental technology, mining rigs designed for the former are also compatible with the latter. (22)

There are many quality Bitcoin Cash-compatible mining rigs available for a variety of prices, designed for everyone from hobbyists to dedicated miners. For example, Bitmain offers a line of inexpensive mining rigs priced that can reliably mine Bitcoin and Bitcoin Cash. (23)

Keep in mind that mining Bitcoin Cash, like Bitcoin, consumes a lot of electricity, and as the blockchain continues to grow in size and complexity, miners will need more advanced equipment (and more rigs) in order to continue turning a profit on it. (24)

Despite this, mining Bitcoin Cash can be a profitable enterprise, and is likely to gain in popularity as the currency itself becomes more widespread.

Recap

Bitcoin Cash is a cryptocurrency ideal for users who are looking for speed, low costs, and reliability.

Its greater transaction speed compared to Bitcoin has made it a viable alternative for vendors and businesses who want to increase their profits.

Additionally, Bitcoin Cash’s lower transaction fees also make using the currency less expensive, making it more accessible to lower-income users.

Bitcoin Cash’s growing popularity among vendors who already use Bitcoin have made it a good cryptocurrency for shopping and other basic business transactions.

Miners will also appreciate Bitcoin Cash’s profit potential, and the fact that Bitcoin Cash is compatible with preexisting Bitcoin mining rigs makes it all the easier to start profiting from mining it.

Ultimately, Bitcoin Cash is a reliable cryptocurrency, one that is certain to grow in popularity and value in the future due to its improvements over Bitcoin.

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What is Ethereum?

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ethereum

Ethereum (ETH) is a cryptocurrency and a distributed computing platform notable for its use of smart contract technology.

Launched in 2015, Ethereum is distinguished from other cryptocurrencies in part by the Ethereum Virtual Machine (EVM), a Turing-complete system that uses a global network of public nodes to run scripts assigned to it by users. (1)

Ethereum also features a cryptocurrency token called “ether” and an internal transaction pricing mechanism named “gas,” both designed to facilitate transactions on the network and combat spam. (2) (3)

Ethereum’s stability and complexity have made it popular both as a cryptocurrency and as a foundational technology for various apps and financial services.

Ethereum is a worthwhile investment for those looking for a cryptocurrency with a complex set of features that go beyond anything else on the market.

Overview

Ethereum was originally conceived in 2013 by Vitalik Buterin, a Russian-Canadian Bitcoin developer who sought a system for creating decentralized applications. In a white paper, Buterin argued that Bitcoin should incorporate a scripting language to facilitate app development. (4) (5) (6)

Buterin’s suggestions were not implemented, so in 2014, he formed a programming team with the intent of forming a new platform that would embody his ideas. Ethereum development began later that year, under the aegis of Switzerland-based corporation Ethereum Switzerland GmbH and the non-profit Ethereum Foundation, both funded through a Bitcoin-powered crowdfunding drive. (7) (8)

After a year of development, a beta incarnation of Ethereum, codenamed “Olympic,” was released to the public in May 2015. The first complete version of the program, named “Frontier,” was later released in July of that year. Beginning with the release of the “Homestead” edition on March 14, 2016, Ethereum is now regarded as 100 percent stable. (9) (10)

Also in 2016, the DAO, a decentralized autonomous organization, successfully raised $150 million dollars in a crowdfunding campaign to develop a set of smart contracts for Ethereum. In June of that year, the DAO collapsed in chaos after a hacker stole $50 million of the funds. (11) (12)

In response to the theft, the Ethereum community opted to perform a hard fork with the intent of reclaiming the stolen funds. Supporters of the DAO were opposed to this, and as a result, on July 20, 2016, the Ethereum blockchain was divided between Ethereum and Ethereum Classic (ETC), an entirely different cryptocurrency. (13) (14)

Since then, Ethereum has committed two more hard forks with the intent of improving DDoS protection and thwarting spam attacks. (15)

Ethereum is differentiated from other cryptocurrencies due to the Ethereum Virtual Machine (EVM), a runtime environment that governs all transactions within the system, specifically its unique system of smart contracts. The EVM is sandboxed and separated from other aspects of the Ethereum network in order to protect it from cyberattack. (16)

Smart contracts are Ethereum’s method of guaranteeing the integrity and safety of transactions. Smart contracts are responsible for carrying out the transaction of value between untrusted agents and are also capable of combating attempted collusion, censorship, and other forms of fraud on the network. (17)

While smart contracts have made transactions over Ethereum more safe and efficient in certain respects, they also possess some security vulnerabilities. For example, smart contracts make bugs and exploits publicly visible on the blockchain, potentially allowing hackers to take advantage of them before they can be fixed. This was how the DAO was hacked and had a third of its crowdfunded capital stolen. (18)

In addition to these features, Ethereum also has several programming languages built in, including Solidity, LLL, Mutan, and Serpent. This allows for easy app development in comparison to Bitcoin and other cryptocurrencies. (19)

Due to Ethereum’s breadth of features, many developers have created or proposed many different uses for the network, including online gambling, electricity pricing, prediction markets, and social media platforms. J.P. Morgan Chase and the Royal Bank of Scotland have also used Ethereum to develop custom systems based on the cryptocurrency’s smart contract technology. (20) (21) (22)

To facilitate Ethereum’s development and use in mainstream banking, the Ethereum Enterprise Alliance (EEA) was formed in March 2017. The EEA includes a large number of Fortune 500 companies, including Microsoft, MasterCard, Intel, and the National Bank of Canada. (23)

Ethereum’s stability, versatility, and credibility have helped it become one of the most popular cryptocurrencies on the market, second only to Bitcoin.

Mining

Unlike Ripple, a cryptocurrency with similar features, Ethereum can be mined, though there are a number of caveats involved.

In contrast to other popular cryptocurrencies such as Bitcoin and Litecoin, it is still possible to mine Ethereum with a GPU and get decent results. Keep in mind that excess heat generated by GPU use may cause wear-and-tear to the computer, so a cooling pad or other cooling solution is recommended if you use GPU mining. (24)

GPU mining is also best attempted with a graphics card that has at least 2 GB of VRAM, as anything lower means that it will take too long relative to electricity and heat costs to generate a single coin. AMD cards are also superior to nVidia cards for the purpose of mining Ethereum. (25)

Like with other cryptocurrencies, Ethereum mining rigs are also available for sale at varying price points, and enterprising miners can also build their own. (26)

Also like other cryptocurrencies, the income generated from mining Ethereum needs to be measured against the cost of electricity in your area. If electricity is too expensive, mining Ethereum is a bad idea because it will never turn a profit. (27)

Despite all this, Ethereum is worth mining because of its popularity and because the overhead for doing so is considerably lower compared to other leading cryptocurrencies.

Recap

Ethereum is likely to remain one of the most popular and recognized cryptocurrencies for a long time to come due to its value, ease of use, and unique suite of features.

More than a cryptocurrency, Ethereum’s virtual machine and smart contract system has given it flexibility and security far beyond what other competing cryptocurrencies can offer.

Additionally, Ethereum’s inclusion of scripting languages is a boon to software developers, who can use the system to design decentralized, open-source apps.

Ultimately, Ethereum is a worthy investment due to its visibility, its truly unique features, and the relative ease in mining it.

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What is Bitcoin?

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Bitcoin (BTC) is a cryptocurrency and worldwide payment system, the first cryptocurrency to be invented and released to the public.

Debuting in 2009, Bitcoin has grown to become a powerhouse in world financial markets due to its high value and its decentralized structure, with no controlling authority. (1)

Bitcoin is fully digital currency, utilizing blockchain technology to enable direct, peer-to-peer transactions between users, powered by “miners” who generate new Bitcoins through the use of their computers. (2) (3)

Bitcoin’s increasing popularity has led many vendors and businesses to begin accepting it as legal tender and many investors to adopt it as a means to make money. (4)

While newer cryptocurrencies have improved on Bitcoin’s basic design, Bitcoin remains the world’s leading cryptocurrency and an important part of any investor’s portfolio.

Overview

Bitcoin was first proposed in 2008 by Satoshi Nakamoto, an anonymous and possibly fictitious Japanese programmer. In a white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” Nakamoto laid out the basis for a worldwide fiat currency accessible to all, cutting out the middlemen of world governments. The name “Bitcoin” is derived from this concept, combining “bit” (the smallest unit of digital storage) with “coin.” (5) (6) (7)

Nakamoto’s concept relied on a technology called the “blockchain,” a public ledger that records all transactions occurring on the network. The blockchain is fueled by “miners,” users who utilize their computers or specialized mining rigs to solve the blockchain’s complex math problems, creating new Bitcoins as a reward for success. Miners are also responsible for processing network transactions, assessing fees for doing so. (8)

There is also a hard limit of 21 million Bitcoins that can be created by miners as a means to combat inflation, though the rate at which new coins are created will naturally slow down as the number of Bitcoins in circulation increases. (9)

Bitcoin transactions take place on a peer-to-peer basis. Transactions are handled by miners, who process them in exchange for fees. Bitcoins are stored in a digital wallet which is identified by an address and can be stored on a computer. (10)

On January 3, 2009, Nakamoto released the Bitcoin client as open source software, though it wasn’t until 2011 that the currency began to gain notoriety. In that year, several major organizations, such as Wikileaks and the Electronic Frontier Foundation, began accepting donations in Bitcoin. The dark web marketplace Silk Road, only accessible through Tor, also became notable for allowing customers to purchase illegal drugs with Bitcoins. (11) (12) (13)

In 2013, Bitcoin saw major expansion, with Bitcoin-based payment processor Coinbase selling over one million dollars worth of Bitcoins in one month. Also, in October that same year, Silk Road was shut down by the FBI and administrator Ross William Ulbrecht (aka “the Dread Pirate Roberts”) was arrested, with 26,000 BTC seized by the government as part of his apprehension. (14) (15)

In 2014, Mt. Gox, one of the oldest and most popular Bitcoin exchanges, was shut down after filing for bankruptcy, with 744,000 Bitcoins going missing. Former CEO Mark Karpelès would later be arrested by Japanese police in 2015 on charges of embezzlement. (16) (17)

Despite these setbacks, Bitcoin has continued to grow as a cryptocurrency. In 2013, growth in Bitcoin spiked after residents of Cyprus began transferring their money to Bitcoin wallets in response to the European Union’s proposed “haircut” of bank accounts in the country due to the financial crisis. (18)

As of 2017, Bitcoin has exploded in popularity, value, and mainstream acceptance. Several countries, including Japan and Russia, have passed legislation legalizing Bitcoin as a form of valid tender. Countless merchants and businesses now accept Bitcoin as payment, and Bitcoin ATMs have become a major presence throughout the world. (19) (20)

However, recent problems with Bitcoin’s scale resulted in a hard fork of the blockchain on August 1, 2017, splitting the currency into two: regular Bitcoin and Bitcoin Cash. Bitcoin Cash is distinguished from Bitcoin by its higher block size limit, a significant bottleneck with Bitcoin because it significantly slows down transactions and has also caused transaction fees to spike. (21) (22)

Additionally, Bitcoin now faces competition from numerous other cryptocurrencies such as Etherium, Litecoin, and Dash, which have significantly cut into its market share. Many of these altcoins boast improvements over the basic Bitcoin design.

Despite this, Bitcoin’s longevity and reliability have established it as a force in the cryptocurrency markets, and one that is here to stay.

Mining

Bitcoin can be “mined,” a process that allows users to make money and also facilitate transactions on the network.

Mining is the term used to refer to using a computer or ASIC mining hardware to solve math problems on the Bitcoin blockchain, which expands the blockchain, makes transactions possible, and also allows the miner to earn Bitcoin passively. (23)

While mining was relatively easy in the early days of Bitcoin, the increasing size of the blockchain has upped the difficulty level considerably. However, it is still possible to turn a profit on the network. (24)

Mining can be done by using a computer’s CPU, its GPU, or a dedicated ASIC mining rig. However, due to the size of Bitcoin’s blockchain, CPU and GPU mining are no longer economical. It can take months, if not years to earn Bitcoin using CPU and GPU mining, and electricity costs could eat away any profits you could make. (25)

Instead, prospective miners should purchase dedicated mining rigs, which possess the horsepower necessary to mine Bitcoin in economical and profitable amounts. (26)

However, mining is costly in terms of electricity. If electricity is expensive where you live, it can significantly eat into or eliminate your profits. To ensure that you can turn a profit mining Bitcoin, make sure that electricity in your area is reasonably priced. (27)

With these caveats out of the way, Bitcoin mining can still be a profitable enterprise.

Recap

As the oldest and most recognized cryptocurrency, Bitcoin played an integral role in shaping the current cryptocurrency scene and revolutionizing money.

While it has its flaws and is not as technologically advanced as some of its newer competitors, Bitcoin’s stability and popularity with traders and businesses make it a strong player on the cryptocurrency markets.

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What is Litecoin?

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Litecoin (LTC) is a cryptocurrency that offers speed, security, and technical enhancements over Bitcoin and other major cryptocurrencies.

Established in 2011, Litecoin is fundamentally similar to Bitcoin, but is distinguished by several major technical improvements, including the implementation of Segregated Witness technology and the Lightning Network, which allow for much faster transaction speeds and lower fees than Bitcoin. (1) (2)

While not as popular as Bitcoin, Litecoin has become one of the hottest commodities on the cryptocurrency market and has been embraced by an increasing number of vendors and businesses due to its speed and reliability. (3)

Litecoin is a worthwhile investment for anyone looking for rapidity and security improvements over Bitcoin and other major cryptocurrencies.

Overview

Litecoin was created and released by ex-Google employee Charlie Lee on October 7, 2011 as an open-source client. (4)

Litecoin was originally designed as a fork of the Bitcoin Core client, distinguished from its parent currency by three major changes. Compared to Bitcoin, Litecoin has a shorter block generation time (only 2.5 minutes, compared to Bitcoin’s ten minutes), a different hashing algorithm (scrypt, as opposed to Bitcoin’s SHA-256), and a higher maximum coin count. (5) (6)

In particular, Litecoin’s scrypt algorithm allows for faster mining, as it is a sequential memory-hard function that processes changes in the Litecoin network very rapidly compared to Bitcoin. (7)

These changes combined mean that Litecoin transaction times are four times faster than Bitcoin, and transaction fees are drastically lower as well, which has become more significant given Bitcoin’s increasingly sluggish transaction speeds. (8) (9)

While initially ignored, Litecoin experienced rapid growth in 2013, reaching a $1 billion market cap in November of that year, and has kept growing since. Litecoin grew so fast that month that it experienced a 100 percent jump in its value within a single day. (10) (11)

In May 2017, Litecoin became the first of the top five cryptocurrencies (according to market cap) to adopt Segregated Witness (SegWit) technology, greatly decreasing transaction times. (12)

SegWit is an attempt to solve the block size limit problem that has increasingly plagued Bitcoin. At only 1 MB per block, Bitcoin’s low block size limit has severely impeded transaction times in recent years, as more and more people begin using the currency. The block size limit has also caused transaction fees to skyrocket. (13)

SegWit technology gets around the block size limitation by splitting transactions into two segments, with one of the segments, the “witness,” containing the unlocking signature. When the transaction reaches its destination, the two segments are rejoined. This allows for faster transactions due to the fact that the individual segments are smaller than the combined transaction. (14)

Additionally, in May of 2017, Litecoin implemented the Lightning Network, another solution to the problem of progressively slower Bitcoin transactions.

The Lightning Network is a technology that allows users to conduct transactions without making them publicly available on the blockchain. To do this, users commit to an amount of Litecoin to be transferred when they open a channel, with additional, unrelated transactions bundled together with that transaction and sent simultaneously. (15)

The combination of SegWit and Lightning Network technology has made Litecoin transactions some of the fastest in the cryptocurrency world. An initial test run of the latter allowed 0.00000001 LTC to be sent from Zurich to San Francisco in less than one second. (16)

Future upgrades to Litecoin will include cross chain atomic swap with Vertcoin, further enhancing its flexibility. (17)

Due to Litecoin’s similarity to Bitcoin combined with massive improvements to Bitcoin technology, many vendors and businesses have begun accepting it, and it has become an increasingly popular cryptocurrency among miners and traders.

Mining

Mining Litecoin is similar to Bitcoin and can be just as profitable, albeit with some important differences.

Like Bitcoin, mining Litecoin with a CPU or GPU is no longer profitable. This is due to the fact that the blockchain has grown so large that it will take CPUs or GPUs forever to mine a single coin. Combined with increased electricity costs and wear-and-tear on your computer, CPU or GPU mining is no longer worth it. (18)

Also like Bitcoin, Litecoin miners have a wide variety of customized mining rigs available for purchase. It is also possible for miners to build their own rigs out of custom parts for maximum flexibility. (19)

However, due to Litecoin’s scrypt hashing protocol, Litecoin mining rigs are considerably more expensive than rigs for other cryptocurrencies. This is due to the fact that Litecoin’s sequential memory-hard function consumes more memory than Bitcoin’s, requiring manufacturers to create more powerful machines to compensate. (20)

Litecoin’s scrypt hashing algorithm was originally designed to allow miners to mine Bitcoin and Litecoin simultaneously, as creator Charlie Lee referred to Litecoin as “silver to Bitcoin’s gold.” It was also designed to keep GPUs and mining rigs from having an advantage over CPU miners, though the number of Litecoins now in circulation and the complexity of the blockchain have rendered that moot. (21) (22)

Like with other cryptocurrencies, miners must also take into consideration their electricity costs. Due to the greater complexity and horsepower of Litecoin mining rigs, they also consume a greater amount of electricity, which should be factored into purchasing and mining decisions. (23)

However, mining Litecoin can still be a profitable enterprise with the right hardware, and due to Litecoin’s growing popularity, mining it is a definite growth market.

Recap

Litecoin is an increasingly popular alternative to Bitcoin that offers significant upgrades in the realm of speed and safety.

Litecoin’s faster block generation time, use of scrypt hashing algorithms, and larger maximum coin count give it distinct consumer advantages over Bitcoin in terms of speed and transaction cost.

Litecoin’s forward-thinking implementation of Segregated Witness and Lightning Network technology have also helped it become one of the most efficient cryptocurrencies on the market, with transactions often occurring in a matter of seconds.

Finally, Litecoin’s rapidity and security have helped it become popular among vendors and businesses, particularly those that already accept or used to accept Bitcoin.

Due to all these upgrades, Litecoin is a worthy replacement for Bitcoin for users looking for faster transactions and lower fees, and a good investment for those looking to diversify their altcoin portfolios.

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