New Digial Currencies Challenge Bitcoin

Posted By on December 1, 2013

Challengers to Bitcoin are popping up on the street. Bitcoins value topped out at $ 1,163 a few days ago but trades now at $941.03.   Ripple and Litecoin are challenging Bitcoin for the digital currency bussiness and Canada’s government project Mintchip is close behind. Read about it here: (The Canadian Mint Is Working On A New Digital Money Project Called ‘MintChip’, No It’s Not Ice Cream…It’s A New Form Of Digital Currency, Does BitCoin Ring A Bell?).

Digital currency Ripple pitches an open source system as a free PayPal alternative to moving money across the globe over the Internet. Ripple is offering its XRP currency at no charge in order to get the tender into circulation after its beta launch in spring 2013. 

Ripple offers two major advantages to bitcoin, they are:

1.  Ripple has set a cap of 100 billion coins on its digital currency. Bitcoin’s digital currency is limited to 21 million coins.

2.  Ripple’s currency, unlike Bitcoins, is not released through computer mining. Instead, it’s held by OpenCoin, which intends to retain 20% of the coinage. That is the profit motive for the company, which pays for the development, coding and marketing of Ripple’s digital payment system.

Litecoin (sign : Ł ; code : LTC) is a peer-to-peer cryptocurrency and open source software project released under the MIT/X11 license.  As of today, LTC is worth approximately 24.50 USD on the BTC-E exchange.Litecoin is the third largest cryptocurrency with a market cap of around 1.2 billion USD (after Bitcoin and Ripple).Each Litecoin is subdivided into 100,000,000 smaller units, defined by eight decimal places. 

Litecoin offers three key differences from Bitcoin,, they are:

1. The Litecoin network aims to process a block every 2.5 minutes, rather than Bitcoin’s 10 minutes.

2. Litecoin uses scrypt in its proof-of-work algorithm: a sequential memory-hard function first conceived by Colin Percival.  The original intended benefit of using scrypt was to avoid giving advantage to GPU, FPGA and ASIC miners over CPU miners, which occurs in the Bitcoin protocol. However, this turned out to be an incorrect assumption: GPU mining in Litecoin’s implementation of scrypt is currently ten times more efficient than CPU mining. FPGA and ASIC implementations are more expensive to create for scrypt than for SHA-256, which is used in the Bitcoin protocol.

3. The Litecoin network will produce 84 million litecoins, or four times as many currency units as will be issued by the Bitcoin network.

Sources: Wise Dog Research, Wikipedia, Information Week

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