It is the first and most major implementation of Bitcoin’s blockchain. However, since Bitcoin, various examples of using blockchain systems have emerged.
One way to use blockchain is to give it a variation on Bitcoin. These variants are advertised as better or more advanced versions of the original Bitcoin, and are sometimes referred to as altcoins. Let’s take a look at some of the major altcoins below:
- Litecoin: Launched in 2011, Litecoin is a very slightly modified cryptocurrency from Bitcoin. The only difference is the fact that block creation takes less time than Bitcoin. In Bitcoin, it takes about 10 minutes, whereas in Litecoin, it generates a block every 2.5 minutes. This means that transactions are confirmed faster. Another difference is the hashing algorithm used. Bitcoin uses SHA256 as its proof-of-work algorithm, while Litecoin uses scrypt . One characteristic of Scrypt is that it is a little more difficult to create an optimized CPU or GPU that can solve puzzles quickly. For this reason, the attractiveness of Litecoin to miners is similar to that of Bitcoin. That said, ASICS exists today that can be used to mine Litecoin.
- Zcash: Zcash was released in 2016. It provides secure transactions with a distributed ledger like Bitcoin. It differs from Bitcoin in that it uses a different proof-of-work algorithm (zk-SNARK) and adopts a different privacy strategy. In the Bitcoin system, the sender, recipient, and amount transferred are all public, whereas in Zcash it is kept secret and protected. At the end of 2017, Zcash crossed a $1 billion market cap.
- Dogecoin: Dogecoin actually started as a joke about being perceived as a cryptocurrency enthusiast. The logo in the coin contains the face of a popular dog named Doge, which is popular on the Internet. It is a complete Bitcoin clone, with no differences or enhancements. The reason is that Dogecoin itself did not start the service seriously. Initially, the value of the coin was very low. Since then, however, its value has risen significantly and has caught the attention of several investors. It recently surpassed $2 billion in market cap. Dogecoin, which the creators first started as a joke, became so valuable that they eventually excluded the creators from the project. In the meantime, Dogecoin’s value declined significantly because Ryan Kennedy, the owner of a Dogecoin exchange called Moolah, was arrested on fraud charges. However, since January 2018, the value of Dogecoin has been rising again.
B. Non-monetary implementation
As mentioned above, blockchain systems can be applied beyond cryptocurrencies. Many novel identities have emerged based on structures worth billions of dollars.
- Ethereum: Ethereum is a virtual currency applied to Bitcoin just as Bitcoin was applied to traditional fiat money. Ethereum provides the infrastructure for apps to run without a central server. Like Bitcoin, it relies on nodes on the internet. In this case, the node provides the CPU needed to run the app. To prevent abuse and remove low-quality apps, Ethereum requires apps to pay in a currency called ether. Code developed on the Ethereum network is executed by software called the Ethereum Virtual Machine. Developers use Smart Contracts to develop apps, which are automatically executed when certain conditions are met. An example of a smart contract is the automatic delivery of goods upon payment completion. Ethereum apps are called DAPs (Decentralized Applications), and hundreds of apps have been successfully launched. Examples of such apps include digital signature apps, predictive software, electric vehicle charging management, and online gambling sites.
- Ripple: While Bitcoin is for the general public, Ripple is for banks and payment management services. Currently, banks use a protocol called SWIFT (International Interbank Telecommunication Agreement), which requires intermediary intervention. Fluctuations in currency exchange rates sometimes delay transactions. Ripple helps financial institutions process, settle and exchange payments in real-time without significant costs. Although not officially adopted, many banks have already started using Ripple in the clinical phase. An important difference between Ripple and Bitcoin is that they do not allow everyone to participate in the network. The computer must prove itself and obtain permission to participate. In this respect, Ripple is not a truly decentralized and public currency.
As we have already seen, Bitcoin also has its negative side, which must be known. However, this does not mean that we should give up on Bitcoin itself by looking only at the negative aspects. It is clear that blockchain was an innovation that solved a number of problems. It is up to us to use it wisely and appropriately.