A purely digital economy, a world in which people don’t carry flat currency like cash and cards but pay for everything with a swipe of their phone, is a bit of pipedream; after all, there are still corner shops out there that don’t let people pay with plastic. Nevertheless, an increasingly cashless world is approaching, driven by the adoption of apps like Apple and Android Pay and the rise of internet-based cryptocurrencies.
It’s the latter that has the greatest chance of changing how the public pays their way. Bitcoin, the progenitor of all 679 cryptocurrencies currently in circulation, recently earned its place in the public consciousness after trumping gold for value and establishing itself as a “hedge” against inflation, political strife and other financial ills. Bitcoin proved at least an occasional panacea for the deflating value of the Venezuelan bolívar towards the end of 2016, for example.
The issue with cryptocurrencies is that the apparent ease at which they’re created carries the risk of rendering most of them redundant – if anybody can create digital money, what makes it special? What separates Bitcoin from Ripple and Dogecoin from Ethereum? And how can a cryptocurrency have any value at all when it’s created in somebody’s basement? Here’s the thing; lots of digital tokens are simply novelties and hobby projects.
The benefits of working in Bitcoin are well established some eight years after its founding, with businesses that operate in the cryptocurrency now commonplace, especially in the internet’s iGaming industry. BitCasino, the first licensed Bitcoin casino, has created a gaming experience as sophisticated as any other out there, with lotteries and a sportsbook, as well as a huge range of slot games. The site also operates a blog to help players get to grips with Bitcoin and live casino and provide detailed guides to playing on their website (read the article here).
Beyond Bitcoin, the most popular alternative currencies or “altcoins” are intended to build upon the original premise of Satoshi Nakamoto’s seminal token. Of the top five cryptocurrencies by market capitalization (overall value), Dash and Monero have enhanced security features, Ripple has greater integration with banks, and Ethereum provides a specialised ecosystem for app development. In contrast, Dogecoin was created because of a meme about a dog.
It’s possible to break cryptocurrencies down further by value, daily usage, and overall quantity. The price of a single Bitcoin ($969.98) is nearly 2,000% more than the second most popular cryptocurrency, Ethereum, at $50.22. Ethereum tokens are far more numerous than Bitcoin though, with 90m of the former to 16m of the latter. The two cryptocurrencies also differ in the number of coins that can be “mined” or created: there can only ever be 21m Bitcoin, while Ethereum amounts are unlimited.
Finally, there are a handful of altcoins out there that have unique functions: Auroracoin is well-placed to become the primary currency of Iceland in the future, while Steem provides an easy way to pay content creators for their work. A cryptocurrency based around collating stock market predictions – Numerai – also made an appearance in February 2017.
So, to answer the question in the title: why do we need 679 cryptocurrencies? We don’t – or at least, every individual person doesn’t. Digital money is created to suit needs and purposes, whether that’s rewarding crowdsourced researchers or professing the creator’s love for a confused shiba inu.