What is Altcoin? Introducing The Types Of Altcoins And Their Characteristics
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What is Altcoin? Introducing The Types Of Altcoins And Their Characteristics |
Altcoin refers to all crypto assets (virtual currencies) other than Bitcoin (BTC), and it is said that there are currently more than 8,000 types of altcoins.
Here, we will explain a total of 5 virtual currencies, "Ethereum", "Ripple", "Litecoin", "Bitcoin Cash", and "Monacoin", which are relatively major altcoins, out of the virtual currencies handled in Japan.
Features of Ethereum (ETH)
Ethereum (ETH) is an open-source public blockchain platform with smart contract functionality.
A smart contract is a protocol (*1) that can create contracts that are automatically executed.
Smart contracts created on the blockchain are attracting attention as a mechanism in which the contents of the contract are executed according to the programming and cannot be changed or fraudulent after the contract is made.
Ethereum also offers decentralized virtual machines called “Ethereum Virtual Machines” for processing peer-to-peer (*2) contracts through ETH, the native token on the Ethereum chain.
Developer Vitalik Buterin started development from 2013 to 2014 under the concept of "next generation virtual currency and decentralized application platform".
It started developing through ICO crowdfunding in 2014, and has now grown to become the second most traded virtual currency after Bitcoin.
In terms of market capitalization, Ethereum is the second-highest virtual currency, and is also known as the “second-generation blockchain platform” after Bitcoin.
*1 A protocol is a set of procedures, regulations, etc., for carrying out a purpose. steps to follow.
*2 Peer-to-Peer refers to communication between users in the same position over the Internet.
Advantages of Ethereum
It has the advantage of creating Dapps (*3) using smart contracts and freely creating tokens using a standard called ERC20.
Specifically, since there is no central administrator, there is no risk of non-performance by the counterparty, and there is no need to worry about the theft of personal or important information.
*3 Dapps (Decentralized applications) are autonomous decentralized applications that do not have a central administrator, but the application system functions normally as a result of the actions of unspecified users.
Click here for more information about Ethereum
Features of Ripple (XRP)
Ripple (XRP) is a virtual currency developed, implemented and maintained by Ripple.As the world's first open payment network, any currency can be easily and quickly transferred, and transaction confirmation can be made within seconds. It is possible.
An open payment system is a decentralized peer-to-peer payment network that Ryan Fugger started implementing in 2004 with the goal of building a decentralized financial system where anyone can create their own currency.
There is a system called SWIFT in the international remittance system in the modern world, but Ripple's goal is to aim for a next-generation platform to replace SWIFT.
It is also characterized by its role as a “bridge currency” that can be exchanged with Bitcoin and the legal currencies of dollars, euros, and yen through XRP, which is the native currency within the Ripple network.
All currencies can be circulated on the network, as the Ripple network automatically converts exchange rates and allows users to pay other people for any type of currency in any other type of currency. .
In terms of transaction processing, it takes only a few seconds, and we have introduced a mechanism that confirms and approves transactions in a very short time thanks to the voting of special nodes.
This mechanism is called PoC (Proof-of-Consensus), and there is no mining like Bitcoin.
Benefits of Ripple
The biggest advantage of Ripple is that the transaction speed is extremely fast. It is said that 1,500 transactions can be handled in one second, and it is possible to realize a large amount of transactions in a short time.
In addition, as mentioned above, Ripple has a function as a bridge between various currencies, and the advantage is that remittance costs can be kept lower than when using conventional payment systems.
Click here for more information on Ripple
Features of Litecoin (LTC)
Litecoin (LTC) creator Charlie Lee, an MIT graduate and former Google employee, designed Litecoin in 2011.
Litecoin is a virtual currency based on peer-to-peer technology, technically based on the same implementation principles as Bitcoin.
Inspired by Bitcoin and technically based on the same implementation principles, Litecoin is built on an open-source cryptographic protocol that is not governed by any central authority.
In terms of block generation speed, it can process blocks every 2.5 minutes, allowing faster transaction confirmation compared to Bitcoin.
It is said that it can be efficiently mined with hardware at the individual user level, and transaction confirmation is fast.
In addition, while the maximum number of bitcoins to be issued is 21 million, the maximum number of litecoins to be issued is quadrupled to 84 million. It's called "silver".
Benefits of Litecoin
You can send money at 1/4 the speed of bitcoin, so you can send money faster and cheaper than bitcoin.
In addition, security has been strengthened by introducing Segwit (*4), and a mechanism has been created to prevent double transactions.
Another advantage of Litecoin is that it has an atomic swap function that allows individuals to exchange money in a highly secure environment without the need for an intermediary.
Atomic swap refers to a mechanism that uses multiple keys called multisig to prevent fraudulent transactions and allow transactions between individuals in their own wallets.
As a result, security is enhanced and more secure transactions and exchanges are possible.
*4 Segwit means to move the part of the transaction data that contains the species name to a different area and sign it independently.
This function makes it possible to increase transaction data within one block.
Click here for more information about Litecoin
Features of Bitcoin Cash (BCC)
Bitcoin Cash (BCC) is a virtual currency that forked (hard forked) from Bitcoin in August 2017.
Originally, there is something called "scalability problem" as a problem of the Bitcoin network.
This is a problem that the network is congested due to the increase in the transaction volume of virtual currency, soaring transaction fees (remittance fees) and delays in remittances occur.
In order to solve these problems, Bitcoin Cash is an altcoin that was branched from the Bitcoin blockchain by expanding the block size from Bitcoin's 1MB to 8MB.
It is now also possible to adjust the block size limit, currently increased to 32MB. Research is underway to enable even greater block size increases in the future.
It also employs a new Difficulty Adjustment Algorithm (DAA), which allows miners to migrate from the old Bitcoin chain to the new Bitcoin chain if they so desire.
As for the history of the hard fork project, as of July 2017, the Bitcoin fork solution "BIP91" received the support of the entire network for computing power and performed an upgrade of SegWit.
ViaBTC, a major mining pool, will prepare a hard fork system to launch Bitcoin Cash based on Bitcoin's own chain, and then upgrade the block size of the blockchain from 1M to 2M.
By unanimous agreement, Bitcoin Cash was born.
The Bitcoin Cash community is conceptually different from the current Bitcoin community core team, so to put it simply, it is already a completely new coin that has nothing to do with Bitcoin.
Difference between Bitcoin Cash and Bitcoin
After the hard fork, Bitcoin Cash will have blocks that can process more transactions than Bitcoin, which is happening with Bitcoin (such as blocks being too small to process as fast as the number of transactions).
No more congestion.
Also, in the scalability problem, Bitcoin uses a method called Lightning Network as a solution.
This is a processing method that uses the blockchain only for the entry and exit of transactions and does not use individual transactions (individual transactions are stored outside the blockchain).
On the other hand, Bitcoin Cash expands the block size and tries to solve the problem by on-chain scaling, so the solution to the conventional problem is also different.
Advantages of Bitcoin Cash
Bitcoin Cash has a larger block size than Bitcoin, which has the advantage of speeding up transaction processing and speeding up remittances, resulting in lower remittance fees.
Also, as mentioned above, the block size is 32MB, which is larger than Bitcoin, so it can be said that delays in remittances are less likely to occur.
Click here for more information about Bitcoin Cash
Features of Monacoin (MONA)
Monacoin (MONA) is a relatively old virtual currency that was released in 2014 and has grown with a lot of support in Japan.
It is often used in communities centered on Japanese people, and is used for comic markets rooted in Japanese culture and real-time tipping combined with video distribution.
Inspired by Litecoin, Monacoin is a web-based cryptocurrency based on peer-to-peer technology.
An MIT/X11 licensed open source software project designed to allow users to make instant payments to anyone in the world.
Adopts PoW mining with Lyra2REv2 algorithm, which effectively blocks ASIC-only miners and allows many people to participate in mining, achieving better decentralization while reducing 51% of attacks. is said to be avoidable.
Monacoin also adopted SegWit and implemented Lightning Network functionality to better support instant payments and cross-chain transactions.
Advantages of Monacoin
Like Litecoin, Monacoin also uses SegWit, so it has succeeded in increasing the number of transactions that can be captured in one block, and has succeeded in improving robustness and convenience in terms of security and payment.
I'm here.
The introduction of SegWit was decided by the opinion of Monacoin fans, and it is said to be the first altcoin to introduce SegWit in the world.
Click here for details on Monacoin
Different altcoins have different purposes Each virtual currency has its own current issues that it wants to solve, and for those issues