Which cryptocurrency should you choose?
There are now more than 6,000 cryptocurrencies in virtual circulation and new ones are appearing every day
Bitcoin (BTC / XBT)
The first name most of us think of when someone says “cryptocurrency”. Invented by the pseudonymous Satoshi Nakamoto in 2009, its market capitalisation (at the time of writing) stands just shy of $700 billion. Bitcoins are divided into millibitcoins and satoshis with, respectively, 1/1000th and 1/100,000,000 of a full-value coin. Only 21 million bitcoins will ever be mined, of which 18.6 million are already in circulation.
Two new cryptocurrencies Bitcoin Cash (BCH) and Bitcoin Gold (BTG) were spun off from
Bitcoin in 2017. Bitcoin Gold can’t be mined using the ASICs conventionally used to mine bitcoins, making it accessible to miners using traditional PC hardware.
Ether (ETH)
The second largest cryptocurrency by market capitalisation, the global stock of Ether is worth $255 billion. Ether is the native currency of the Ethereum blockchain and is issued to miners who process transactions. Ethereum was developed as a scripted platform for adding real-world products, such as stocks, to a blockchain in the same way as units of virtual currency. As such, the Ethereum codebase is frequently used as a jumping off point for other cryptocurrencies, including NFT ( see below).
In 2017, Microsoft, Banco Santander, the National Bank of Canada and around 30 other organisations formed the Enterprise Ethereum Alliance with the goal of creating a standard version of the Ethereum software that businesses can use to track data and financial contracts.
Non-fungible token (NFT)
NFTs (pronounced “nifties”) attracted worldwide attention in early 2021 as a way of selling digital assets, such as the world’s first tweet (for an equivalent of $2.9 million, which Twitter’s Jack Dorsey donated to charity), virtual locations in computer games and pixel-based art. Crypto artist Beeple sold a single image, Everydays: the First
5000 Days, for the equivalent of $69.4 million – slightly more than what Picasso’s La Gommeuse sold for in 2015.
The term “non-fungible” denotes the fact that NFTs are not directly exchangeable since they are tied to specific objects. You could, for example, swap any two Ethereum with no discernible outcome, but artworks, text and other assets recorded in the NFT ledger are unique, and thus not interchangeable, or “fungible”.
Dogecoin (DOGE)
Inspired by a meme, Dogecoin is approaching its eighth birthday and has a market capitalisation of $34 billion. Its protocol is based on Luckycoin and Litecoin and, at one point in first year of existence, the number of Dogecoins being traded outranked even the longer-established Bitcoin. It’s steadily increasing in value as it becomes more widely accepted and, by May 2021, its value had increased by 20,000% over the previous year, and SpaceX announced that it would accept the coin as payment for an upcoming lunar mission.
Litecoin (LTC)
A fork of Bitcoin, Litecoin was spun out of its parent cryptocurrency in 2011. Its subunits, millilitecoin and microlitecoins (or photons), are equivalent divisions to Bitcoin’s millibitcoins and satoshis. However, by processing transactions in 2.5 minutes, rather than ten, Litecoin is a “faster” cryptocurrency than its predecessor, confirming transactions in less time. At the time of writing, its market capitalisation was just under $10 billion.
Basic Attention Token (BAT)
Built by Brave (the browser people) on the Ethereum blockchain, BAT was used to fund further development of the browser and, on an ongoing basis, to reward online publishers when Brave users view their content. This is apt as Brave is designed, in part, to reduce the number of adverts that its users see. There is $750 million worth of BAT in circulation.
Monero (XMR)
Monero allows cryptocurrency investors to keep their holdings hidden. Transactions are encrypted so that it’s impossible to see who holds what at any moment, and it’s therefore said to be popular on the dark web and as a medium for settling ransomware demands. However, it will be equally attractive to anyone who believes that crypto holdings should be as private as bank balances. In 2017, the US Internal Revenue Service offered a $625,000 bounty for developers who could help it crack the Monero blockchain, among a handful of others. Should anyone succeed, the IRS might discover which taxpayers hold a portion of the coin’s cumulative $3.9 billion value.
Microsoft’s unnamed cryptocurrency
This one might never come to pass, but Microsoft has filed a patent for a new kind of cryptocurrency that’s generated using “human body activity” rather than electricity-intensive mining. “For example,” says the patent, which you can read at
pcpro.link/324mic, “a brain wave or body heat emitted from the user when the user performs the task provided by an information service provider, such as viewing [an] advertisement or using certain internet services, can be used in the mining process”.