What other digital currencies are there?
Published on May 9, 2013 at 11:07 BST
Bitcoin might currently be getting the lion’s share of media attention, as far as digital currencies go. But it’s not the only form of electronic money being mined, traded and spent.
Let’s meet some of the other digital currencies making the rounds online:
According to the Bitcoin Forum, bbqcoin was “forgotten after (a) 51% attack on launch, now revived and active … super fast version of LTC (litecoin).”The site’s operator – Bitcoin Forum user CaptChadd – launched a new bbqcoin thread on the forum on May 7, 2013, concluding his message by saying, “I consider BQC to no longer be a joke but a real cryptocurrency only with a dry and sarcastic sense of humour … and a great taste. J”
Making its debut in early May 2013, chinacoin (CNC) is a litecoin-based currency that uses the scrypt password-based key derivation function. It’s produced in 60-second blocks with 88 coins per block at the moment. That amount is expected to halve after 2,628,000 blocks (about five years), with the difficulty of mining retargeted every 5,040 blocks. Chinacoin is designed to generate no more than 462.5 million coins. Prices can be tracked at BTC-e.
Described as a bitcoin fork, devcoin was designed as an “ethically inspired project … to help fund open-source projects created by programmers, hardware developers, writers, musicians, painters, graphic artists and filmmakers.” While devcoin is based on bitcoin, mining the currency is much easier. Each new block generated provides 5,000 devcoins to the miner and 45,000 coins to developers, writers and other participants (a 10/90 split). Devcoins are generated at a rate of 50,000 coins per block “forever”. With an average of 144 blocks per day, that means around 7.2 million new devcoins per day.
An open-source currency based on litecoin, feathercoin (FTC) made its debut in April 2013. Like litecoin, feathercoin is mined using a scrypt-based hashing algorithm, which can be solved with GPU hardware rather than the more costly ASIC hardware (now the mining hardware of choice for bitcoins). Where litecoin will ultimately produce 84 million coins, feathercoin has a hard limit of 336 million coins. The block reward for successful feathercoin miners is currently 200 coins, with the reward halved every 840,000 blocks (with about one block every 2.5 minutes). Feathercoin prices are tracked by the exchanges BTC-e, Vircurex, Cryptonit and Bter.
Groupcoin was devcoin’s predecessor. It was designed as a fallback currency in case devcoin didn’t turn out as planned. Groupcoin generates 50 coins per block “forever”.
Ixcoin is described as a bitcoin-based peer-to-peer currency with a shorter maturity. It’s generated at 96 ixcoins per block, with the same hard limit – 21 million coins – as bitcoin. However, it’s not one of the more active cryptocurrencies at the moment: Its page on GitHub has shown no recent activity, its Tweets indicate the site has struggled repeated to remain up and online, and its web pages (other than the home page) show only an error message. A number of users posting recently on the Bitcoin Forum’s Alternate Cryptocurrencies section have essentially said they’re giving up on the currency.
Like its younger cousin feathercoin, litecoin (LTC) is designed to be easier to mine than bitcoin, as it requires a scrypt-based proof of work that makes mining possible with GPUs rather than ASICs. Litecoins have a hard limit of 84 million coins (four times bitcoin’s ultimate limit), and transactions can be verified more quickly than bitcoin transactions: 2.5 minutes vs. 10 minutes. Litecoin miners are rewarded with 50 new coins per block. Litecoins are traded on four exchanges: BTC-e, Vircurex, Omnicoins and VXBTC.com.
Like many of the other alternative cryptocurrencies described here, namecoin (NMC) is based on bitcoin technology. Unlike the other currencies, namecoin is an alternative, decentralized, peer-to-peer DNS (domain name system) as well as a currency. Whether as a currency or a DNS, however, it is not currently widely used.
Novacoin is described as a “hybrid scrypt proof-of-work- and proof-of-stake-based cryptocurrency.” Under its existing coding, it has a hard limit of 2 billion coins; however, that limit can be lifted if needed. Novacoin is similar to ppcoin, but uses as “slightly different emission model”. The currency can be traded on Vircurex.
Ripple Labs Inc is the organization behind ripple, which is not a digital currency, but an open-source, peer-to-peer payment network. As described on the Bitcoin Forum, ripple XRP (called “ripples”) is an innovative IOU exchange rather than a coin.
Another project forked from bitcoin, ppcoin (PPC) is designed to “keep as much as possible the original bitcoin’s preferable properties.” Launched in 2012, it was also created to be “the first long-term energy-efficient cryptocurrency.” Instead of proof-of-work, ppcoin is mined using proof-of-stake ... which essentially uses the currency itself to protect the network. PPcoin doesn’t have a hard limit like bitcoin, but is patterned to mimic gold’s natural scarcity: an inflation rate of about 1 percent through proof-of-stake minting is balanced by a built-in destruction of transaction fees.
Another digital currency based on bitcoin, terrcoin (TRC) is designed to end up with no more than 42 million coins and boasts a transaction confirmation time of 120 seconds. The initial block reward for mining is 20 terracoins, with that amount cut in half every 1,050,000 blocks (around four years). First mined in October 2012, the currency has experienced some recent troubles – hashing power spikes, troubles with difficulty retargeting, etc. – but has undergone fixes and continues to be traded on Vircurex and a few other exchanges.
Created by Stan Stalnaker, Ven is a global digital currency designed to enable commerce among members of Hub Culture, Stalnaker’s business club for international travelers, movers and shakers. Ven was launched in 2007 and is backed 100 percent by reserve funds, which is aimed at minimizing the risk of inflation. The basket of commodities and currencies that Ven is pegged to includes carbon, making Ven “a stable currency that supports the environment,” Stalnaker says. Major banks such as Citibank have purchased Ven for in-house use, and the currency is indexed by Thomson Reuters.
Pegged to a basket of 22 international currencies, zen is basically an “anti-bitcoin” ... linked to fiat values and “designed specifically not to rise or fall dramatically in value.” The reaction from bitcoin fans has been underwhelming so far: “kinda limited in my opinion, probably similar to Amazon coins,” noted one member of the Bitcoin Forum.