Luckily, only a handful of these truly influence the industry, so understanding what these cryptos do and how they work is key to understanding the whole space.

In this artcle we’ll take a quick look at 10 of the most important and interesting cryptos, and simply explain what they do and where they’re going.

Bitcoin (BTC)

Short explanation

Internet money and digital gold.

Longer explanation

Bitcoin is the original cryptocurrency. Released in early 2009, it is a new form of internet money that is fundamentally different from existing currencies.

It is decentralised, meaning it isn’t controlled by any single company or person, and all transactions are peer-to-peer. The history of all transactions is continually being verified by powerful computers, so it is impossible to change once a transaction has been accepted.

This means that anybody in the world is able to buy bitcoin and send money to anybody else cheaply and quickly, which has never been possible before.

Platform

Bitcoin blockchain, using Proof-of-Work (PoW) consensus.

Current issues

Scalability. Bitcoin can typically handle 5–7 transactions per second, with fees from a few cents to a few dollars. When the transaction volume on the network increases, fees skyrocket and transactions take a long time to clear.

In contrast, Visa and Mastercard can reportedly handle around 2000 transactions per second.

In order to be a global payments system, Bitcoin needs to improve on this dramatically.

More on Bitcoin here.

Ethereum (ETH)

Short explanation

Developer platform, as well as programmable contracts and money.

Longer explanation

Ethereum utilises smart contracts, which allow somebody to send money to another person automatically, but only when a certain set of conditions are met. For example, during the process of selling a house, the buyer and seller could enter into a smart contract that transfers ownership to the buyer, and money to the seller automatically once a deal has been reached.

The other major benefit Ethereum holds is its developer platform, that allows decentralised applications (or Dapps) to be built on top of Ethereum. An easy way to think about this is that Apple or Microsoft allow developers to build applications on top of their software, and Ethereum takes a similar approach. It has its own functions, but also allows other developers to use its blockchain to build new applications and uses.

This has also given rise to ICOs (initial coin offerings) being held on Ethereum’s network. ICOs allow developers working on new blockchain technologies to raise money by selling off tokens in their future application.

Platform

Ethereum blockchain, currently using PoW, but will eventually move to Proof-of-Stake (PoS).

Current issues

Ethereum has a few issues at the moment. It is suffering the same scaling problems as Bitcoin due to the inherent size of their transaction capacity (more on how blockchain tech works here).

It’s become clear since the crash of crypto prices in early 2018 that the market for Dapps is much smaller than first thought, so Ethereum is experiencing slower than expected growth.

There are also other platforms such as EOS creating similar technology that’s simpler to use, which are putting pressure on Ethereum in the long term.

Ripple (XRP)

Short explanation

Enterprise payment network.

Longer explanation

Currently it takes days and massive fees for international payments to go through. Ripple (or the token XRP) is intended to be used by banks and payment providers for rapid, cross-border payments with incredibly low fees.

Platform

Distributed ledger (but not a blockchain) owned and operated by Ripple Labs, using a ‘proof-of-correctness’ consensus algorithm.

Current issues

Ripple is the name of the company that created and owns most of the XRP token. It is not considered a decentralised cryptocurrency, as Ripple owns over 50% of all XRP tokens in circulation, as well as the majority of validator nodes in the XRP network.

This is not to say that Ripple the company won’t be successful with their technology, but it should not be considered in the same category as true cryptos such as Bitcoin and Ethereum, and has a long way to go to prove that it’s a reliable, trustworthy platform for international payments.

More on Ripple here.

Bitcoin Cash (BCH)

Short explanation

Bitcoin clone, internet money.

Longer explanation

Bitcoin Cash was born from a rift in the Bitcoin community over how to scale the network. Those who believed that the Bitcoin block size should be increased split off to create Bitcoin Cash. Each block is 8MB instead of Bitcoin’s 1MB, so BCH can handle up to 60 transactions per second compared to BTC’s 7.

Here’s a deeper explanation of the fork and why it occurred.

Platform

Bitcoin Cash blockchain, hard forked from Bitcoin in August 2017, using PoW consensus.

Current issues

Bitcoin Cash and its creators have been in an endless quest to prove the legitimacy of BCH over BTC, which has resulted in them being involved in some potentially shady activity.

The network appears to be far more centralised than Bitcoin, and infighting between the lead developers and marketers plagues the brand. BCH sees itself as the ‘true bitcoin’, but lags far behind the original in average users and transaction volume.

EOS (EOS)

Short explanation

Decentralised applications and smart contracts.

Longer explanation

EOS is building a platform for building decentralised applications and smart contracts. It is often compared to Ethereum that does much the same thing already, but EOS appears to be much easier for developers to build on, as well as having a broader range of features.

Platform

EOS blockchain using delegated proof-of-stake (dPoS).

Current issues

The EOS mainnet was launched on the 1st of June, 2018 after a 12 month crowd sale. It is therefore the youngest crypto on this list, and has a long way to go in proving that it is a viable crypto in its own right, let along a possible alternative to Ethereum.

More on EOS here.

Litecoin (LTC)

Short explanation

Faster Bitcoin.

Longer explanation

Litecoin is often thought of as the silver to Bitcoin’s gold. It has a similar function, but is focused more on small, frequent transactions than as a store of value like Bitcoin.

Transactions on the Litecoin network have lower fees are confirmed 4x faster.

Platform

Litecoin blockchain, hard forked from Bitcoin on October 2011, using PoW.

Current issues

Since Litecoin runs on a very similar blockchain to Bitcoin, it will eventually have similar scaling issues once the network grows to a certain size. However, the development community is trying to prepare for this by implementing scaling solutions early, such as Lightning Network.

Stellar (XLM)

Short explanation

Super fast digital payments

Longer explanation

Stellar Lumens, the coin operated by the nonprofit Stellar Development Foundation, can be used as currency similar to Bitcoin and Ripple. The platform is built for speed and ease of use, with transactions being completed in 3–5 seconds, and fees as low as $0.01

The goal of the Stellar Development Foundation (SDF) is to act as the world’s digital payment method by connecting users all over the world with banks and payment systems. The SDF plans to “fight poverty and maximise individual potential” by delivering their services primarily in regions where citizens have low access to banks, such as in Oceania.

They currently have a partnership with IBM, and have many well-known and influential people on their team.

Platform

Stellar blockchain operating with the Stellar Consensus Protocol (SCP).

Current issues

There are a few concerns around the level of security and decentralisation of the platform, but other than that, Stellar is in a great place. The team is very experienced and well-known, and they have some fantastic advisors on board.

More on Stellar here.

Tether (USDT)

Short explanation

Price equals 1 USD.

Longer explanation

Tether is a cryptocurrency pegged to the value of a US dollar, and is therefore referred to as a ‘stable coin’. This allows it to act as a USD substitute that can be moved between exchanges, instead of traders having to cash out for real dollars.

Platform

Tether blockchain, no consensus mechanism.

Current issues

Tether claims to keep a 1:1 reserve of real US dollars for every USDT released. It has had issues in proving the validity of this claim, which has caused many in the community to become skeptical of the company behind the token.

More on Tether here.

IOTA (MIOTA)

Short explanation

Internet-of-things (IoT) payments.

Longer explanation

IOTA is a fundamentally different type of crypto than most others. It is built on top of a directed acyclic graph (DAG) that they call a ‘tangle’ as opposed to a blockchain, which allows it to have zero fees and rapid transactions, as well as being easily scalable.

It is therefore suited for microtransactions of value or data between internet-connected devices.

Platform

IOTA tangle, using a small amount of PoW with each transaction.

Current issues

Since the technology is so new and different, IOTA needs to prove that their technology can perform the way they claim, as well as being resistant to hacks and bad actors.

There are also a few question marks around the team, with some in the community being concerned by the direction the team is taking.

More on IOTA here.

Monero (XMR)

Short explanation

Private, untraceable digital cash.

Longer explanation

Monero is a crowdfunded, open source and community driven privacy coin. Unlike Bitcoin, whos users aren’t fully anonymous, Monero is 100% private, secure and untraceable. It uses different algorithms to any other crypto that mix transactions and randomly generate fake addresses.

This means that it’s impossible to see the sender and receiver of a transaction, as well as the amount being transferred.

Platform

Monero blockchain with PoW consensus.

Current issues

The technology and team behind Monero are very sound. The project has been around for a long time and the team are all volunteers. However, due to the high level of privacy in Monero, it attracts a lot of hackers, criminals and others trying to evade the law, and is therefore being more frequently associated with these sorts of activities, which hurt its future prospects.

More on Monero here.