Cryptocurrencies have somehow become a global phenomenon known to most people. Some people say it’s ‘the 21st century unicorn,’ while others think it’s ‘the money for the future.’ In fact, there’s no doubt that the speedy global adoption of cryptocurrencies lies on blockchain technology. The blockchain technology has so many outstanding features that made companies, organizations, and so on to lurk onto this opportunity like a heat-seeking missile.
That ado, since mid-December of 2017, it is crystal clear that Cryptocurrencies have experienced heavy drops and speedy recoveries, but January and February 2018 brought about an overwhelming nosediving. This was occasioned by an avalanche of stiff regulations proposed by Governments and central banks of the world.
However, what compounded the problems faced by cryptocurrencies was the system upgrade by Binance — one of the world’s biggest cryptocurrencies exchanges that sparked an extensive halt of trading, with customer withdrawal of funds. Binance actually denied a case of hacking, saying its users lost fund to a phishing attack.
The other incident that greatly shook the cryptocurrency world was the announcement by Google that it was going to crack down on cryptocurrency-related advertising. The company said it was going to ban ads about cryptocurrency with effect from June on its platform, to what it termed “deceptive content.”
Looking at the trio of Bitcoin (BTC), Ethereum (ETH), and the Litecoin (LTC), it will be interesting to know how they have risen, bashed, pummelled, and weathered or are weathering the storm.
Bitcoin was launched in early 2008 by a person or a group of people called Satoshi Nakamoto and was based on a hitherto unknown invention called the blockchain, which is also the basis of almost all the majority of cryptocurrencies out there. The blockchain is a distributed database where all the transactions or data are stored on blocks in the network.
The network is powered by miners and it works on a computing power which is used to calculate or mine the next block. The essence is to generate new coins as well as keep a perfect track of new transactions. The mining of bitcoin is based on using the computer to solve complex mathematics puzzles and the winner is rewarded with 12.5 bitcoins every 10 minutes.
Bitcoins can be bought or sold in many marketplaces using different currencies. Coinbase, Bitstamp, and Bitfinex are some of the leading bitcoin exchanges. Bitcoins are transferred through the use of mobile apps or computers. Unlike traditional currencies, bitcoin can be stored in a digital wallet — that is a kind of virtual account that exists in a cloud.
The bitcoin has had its fair share of ups and downs but the very first bitcoin currency transaction happened on January 12 in 2009, in block 170 between Nakamoto and programmer Hal Finney. By October 5, the exchange rate was established by New Liberty Standard. The value of bitcoin was pegged at $1 to 1,309.03BTC.
The rave for bitcoin went on and as at February 9, 2011, the bitcoin came at parity with the dollar with $1 equalling 1 BTC at Mt.Gox. In February 2013, Coinbase reported selling $1 million worth of bitcoins in a single month at over $22 per bitcoin, and by December, the price has hit highs of around $1,000 and lows below $600. The price of bitcoin plummeted down to as low as $300 before the end of 2013 and rose to $1000 two years after in 2015.
As a currency that was operated with anonymity in mind, the bitcoin has had challenges especially as to do with cybercriminals. In January 2014, Mt.Gox went offline with 850,000 bitcoins which the owners never saw again. Though it may not be easy to say exactly what happened the bottom line was that some people have dishonestly laid their hands on bitcoins that were valued then at a whopping $450 million.
The year 2017 may be said to be the year bitcoin hit its peak. As at May, The Economist reported that the bitcoins in circulation were worth over $43 billion, with one bitcoin worth more than $2,600, over twice as much as an ounce of gold. This was, however, a tip of the iceberg to what was going to happen later on in the year.
By mid-December, the bitcoin soared astronomically to an all-time high. The exchange rate was close to $20,000 to 1BTC. It, however, suffered a crash in the first quarter of 2018 to almost half and even fell to as low as $6,500 in early April before bouncing back to $7,845 on May 22.
The reason for the fluctuating price may not be very clear but one cannot take the fact away from bitcoin that no other sector in the business world has recorded such an amazing growth. Bitcoin recorded a whopping 2,068 percent rise and the cryptocurrencies altogether had a 3,300 percent rise in 2017, which equalled a market cap of around $605 billion.
The capitulation is of immense concern to operators and this brought the gathering of more than 8,400 people together at Hilton Ballroom in New York this May to ponder the future of bitcoin.
If the report by Bitcoin Magazine that the Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange (NYSE), is developing an online trading platform that would allow large investors to trade bitcoin directly becomes a reality, the bitcoin will definitely be on its way to an overwhelming climb once again.
The Ethereum unarguably occupies the second position after the Bitcoin in the cryptocurrency world, indicators, however, point to the fact that it is geared to overtaking the bitcoin with time. Ethereum is an open-source public software platform, that focuses on blockchain technology. The concept was developed by Vitalik Buterin in 2013.
Ethereum did not just fall into the second position by chance it was due to a diligent work by the founders and also, it has the cryptocurrency (Ether), smart contracts, and the Ethereum Virtual Machine (EVM). Ethereum was conceived to use a “proof of stake” system. It allows both permissioned and permissionless transactions.
Some other factors in its kitty are that the average block time for Ethereum is 12 seconds, this allows Ethereum miners to complete more blocks and receive more Ether. Estimates say that by 2021, only half of the Ether coins will be mined and this is a big plus. It’s also noteworthy to point out the fact that Ethereum does not offer block rewards but rather allows miners to take transaction fees.
A lot of memorable events took place in the life of ether since it was conceived in 2013. In July 2014, the launch of the first Ether sale took place by exchanging 31,591 BTC for 60,102,216 Ether. The presale that took place on August 6, 2014, raised more than $14 million.
On September 2, 2014, presale investors received 60 million Ether and in the same year, precisely in October, the Ethereum protocol permitted the creation of SETH for every block mined. May 2016 brought another revolution whereby Ethereum earned a notable media coverage when the DAO raised a record $150 million in crowd sale.
Ethereum was hit by an unfortunate incident between June 20-30, 2016. Hackers struck and made away with 450 million worth of Ether and this raised a lot of concern about the platform’s security that led to a split into Ethereum (ETH) and Ethereum Classic (ETC).
In 2017, however, Ethereum was able to get over the problems and continued to make waves in the market. In the month of March, Ethereum reached a daily volume of $450 million and by June 12, it was recording up to 500 percent rise since January 1, 2017.
It’s no longer news that the cryptocurrency industry was hit by a quagmire of problems and came plummeting to an all-time low in the early months of 2018, but the fact that Ethereum had a good run and grew more than 13,000 percent in 2017 is a factor to contend with. Ethereum prices as at May 4, 2018, was reported to continue soaring as Ether surges up towards $1000 a coin, which is an indication that it may still hit and overtake its late 2017 prices.
Ethereum is not as monopolistic as bitcoin and is, therefore, more prone to reforms. This singular characteristic may confer on it the ability to amazingly overtake bitcoin as is being propounded by some pundits in the cryptocurrency world.
The Litecoin is definitely not enjoying the third position in strength as regards the cryptocurrencies as they are currently doing in the market but it ’s worth the while to look succinctly at how it’s faring. Litecoin was created by Charles Lee on October 3, 2011. It was dubbed the second most successful cryptocurrency after bitcoin and had the factor that the block time was 2.5 minutes as compared to bitcoin’s 10 minutes as a plus.
By January 1, 2013, LTC was worth seven cents but rose up astronomically to 423 by December, representing 328 times its initial value. By November 2013, it reached a $1 billion market capitalization. Litecoin has a total of 84 million coins that can be mined as compared to bitcoin 21 million.
lite coin adopted segregated witness in May 2017 and was the first to be used to complete Lightning Network Transaction, by transferring 0.00000001 LTC from Zurich to San Francisco in under one second. To confirm the wide acceptability of Litecoin, the EU online retailer Aiza.cz in February 2018 began accepting the coin as a payment method.
On April 20, 2018, the Litecoin rose by 4.95 percent to trade at 4149.19. Though it lost more than 50 percent total market cap in Q1, it, however, portends a strong return to form.
The fact that Litecoin has not been ditched in favour of bitcoin should not be a surprise, it has continued to make waves in the market because its mining process is quite different from that of bitcoin. The bitcoin uses the SHA-256 hashing algorithm that requires ASIC microchip technology, Litecoin, on the other hand, uses the Scrypt algorithm.
Putting aside the market’s monstrous volatility, Roger Ver, an expert in the cryptocurrency world has made an unprecedented announcement that he believes other cryptocurrencies will exceed bitcoin in value. He stated: “I see it happening, and I believe it’s imminent.” It’s left to find out what the market will come up with but in the face of the stiff competition, nobody will be expected to be caught napping.