There are new cryptocurrencies being created everyday to try and get a cut of the market capitalization that Bitcoin currently has, which is $100 billion. New innovators are creating their own versions of the cryptocurrency over disagreements it’s overall design, as well as the chance to make a quick dollar here and there.
Who doesn’t want to earn a bit of money here and there?
One of the main competitors to the king of cryptocurrency is a by-products called Bitcoin cash (original I know). This strand is currently being valued at around $8 billion, followed by a less than successful attempt at creating another subset called Bitcoin gold.
What does it mean when people can conjure up an attempt to copy the original?
Well it’s a bit of a double-edged sword when it comes to the decentralized nature of how Bitcoin came to be. It paves the way for experimentation and grants users access to poke and prod the design to pick out the best bits and establish a new form of cryptocurrency if they do so desire.
This is the territory that comes with open source software, it means that anyone with a will to come in and make it better, can easily do so. There’s also the potential for the off-shoot to become hugely successful and adopted as a new form of cryptocurrency and can knock Bitcoin off its podium. The owners can start pre-mining their own coins in an attempt to profit from their venture.
Each strand that breaks off from Bitcoin aims to solve a problem that some developers believe the original has. The Bitcoin gold branch aimed at trying to solve the problem that only specialised hardware and the amount of power can be used to successfully mine Bitcoin. They planned to solve this problem by allowing the cryptocurrency to be mined using any old gaming graphics card (granted that it’s powerful enough).
In the case of Bitcoin Cash, they planned increasing the blockchain size to 8 megabytes from 1 megabyte in the Bitcoin blockchain. In turn this will allow transactions to increase in speed, as well as reduce fees.
The apple never falls far from the tree
The benefits of creating a strand off the original Bitcoin has appealed to quite a few entrepreneurs who are keen to reap the rewards, if executed with precision. With a few willing participants, an offshoot can become pretty successful. Take Super Bitcoin for instance. Here’s what some lawyers are saying. They have the backing of a Chinese cryptocurrency entrepreneur Li Xiaolai, and have promised to make Bitcoin great again, by working hard to increase the size of blocks (what transactions take place on), this would in turn reduce confirmation times and also reduce fees.
One benefit is that the strand has access to the user-base of Bitcoin, that and, brand recognition. When coins split from the main chain, the Bitcoin investors get the equivalent of their holdings in this new form of cryptocurrency. This has caused a stir with original users in Bitcoin because people feel like they are profiting off free money. Check out this story about people robbing a lot of bitcoin.
The question is though, how the likes of Hedge funds and banks will deal with the rise of all these subsidiary-like coins and how popular they are likely to come. So popular, that the government is looking to tax all cryptocurrencies. The effects of which will influence Bitcoins stand in the markets, and traders are continuously speculating on which one will come out on top.
Despite the many rivals, Bitcoin still has a market leading presence in the cryptocurrency market. There are lot of people AND businesses who are opening their doors to accept Bitcoin as an official method of payment for goods and services.