When wondering how to choose cryptocurrency, think of the models you use for other situations. For example, for choosing your friends, education, partner, future job or business to enter.
It is possible that you will base your choice not on a single one, but many factors. Such as history, security, recommendations, or convenience.
In the following lines, we will cover three cryptocurrencies and a model to decide how to choose cryptocurrency that suits your needs.
What is Bitcoin?
Since the first cryptocurrency, there are a lot of pros and cons of Bitcoin. Recently, China’s Center for Information and Industry Development (CCID) even positioned Bitcoin to 15th place in blockchain rankings.
But, undoubtedly, Bitcoin has the longest history (since 2009), and it is the first ranked cryptocurrency ever since. It is the reason why Bitcoin is so expensive.
It seems that any theory and news are helping Bitcoin to reach the minds of ordinary people. As a result, Bitcoin becomes recognized while introducing other cryptocurrencies, too.
So, many connect cryptocurrency to Bitcoin and is common that the whole market moves as the supply and demand to Bitcoin changes. On December 2017, Bitcoin had the value of $20.000. But, the decay of people buying Bitcoin ever since led the downfall of the market.
Nevertheless, 84% of the Bitcoin is “mined,” and already in the “wallets.” You need a wallet for any cryptocurrency since it is a nothing more than a public key required for transactions. But mining is specific for Bitcoin and some other cryptocurrencies.
How Bitcoin Works?
Mining is a form of a transaction approval that is common for Bitcoin. Computers that are checking the transactions, so-called miners, get their reward in cryptocurrency.
Compare this model to validating some person or business among your network of people. To prove your choice, you would need to reach out to all of your friends and relatives. If you have a vast number of connections, it becomes a time-consuming and costly process.
Same goes for mining. Because of Bitcoin’s maximum supply capped at 21 million, other issues occur. One is a problem of bitcoin transaction unconfirmed for hours. Other is electricity for computing, raising questions of ecology and sustainable operations in the long run.
If wondering how to make money with bitcoin, mining is not a solution. If the electricity bill is high and price melts, does it matter how long does it take to mine a Bitcoin?
But, is it too late to buy Bitcoin? Yes, if you are wondering is it too late to invest in Bitcoin. But the answer is “no” if you want to engage in speculations. It is because finding the cheapest way to buy Bitcoin and selling for more is logical. However, there is no logic at the market volatility that is common for Bitcoin.
Prepare yourself for shocks caused by the daily reading of the news suggesting that Bitcoin is going to zero.
A cryptocurrency able to process the more significant number of transactions is Litecoin. A former employee of Google, Charlie Lee, created Litecoin as an open-source client based on Bitcoin in 2011.
Litecoin is very similar to Bitcoin, yet it is an improved version of Bitcoin. But, in the past years, Litecoin position ranged from top 5 to top 10.
It is because if Bitcoin is digital gold, Litecoin would be digital silver. The idea for Litecoin was the coin to use in everyday life, like paying for a coffee or groceries.
Therefore, 84 million Litecoin will be available in future use. That is four times more than Bitcoin! And the transaction processing time is four times faster, too. It is because Litecoin takes 2.5 minutes to create a block.
Litecoin improved the speed of transactions by introducing the Scrypt algorithm. The reason was to make the personal mining competitive to “professional” mining. As a result, mining Litecoin is possible only with Graphics Processing Unit (GPU) of your PC.
If you want to learn how to mine Litecoin with GPU, you will need a miner software, a lot of settings, and a lot of learning. It is because mining is becoming unprofitable if not properly conducted.
Many of the new cryptocurrencies are using the same algorithm as Litecoin. Following our previous example, now you can validate your new friend faster. Another example is if you want to check whether someone is your relative. Blockchain introduced by Litecoin will review the family tree more quickly than it was possible with Bitcoin.
Since improved Bitcoin, will Litecoin go up in the future? It is hard to predict whether it will stay in top 5, but Litecoin won’t replace Bitcoin as number one cryptocurrency. Still, if you are searching for how to invest in Litecoin, there are multiple exchanges.
The answer is – not much. You can purchase and send gifts or pay for some software development. But the announced acceptance for Litecoin didn’t happen. And nobody knows how high can Litecoin go without the acceptance of merchants.
Litecoin price prediction 2019 had many variations. It is because the future of Litecoin is uncertain, and nobody can’t predict will Litecoin go back up again.
Further in the development of the “everyday” cryptocurrency is Dagcoin. Created by an Estonian entrepreneur Nils Grossberg, Dagcoin is introducing a different model of validation. Different than blockchain and not well-known, but innovating for sure.
Blockchain has a series of blocks with only one direction. Problem is when two miners validate at the same time and create a new block. In that case, the blockchain network needs time to conclude which branch of the chain is correct. This time is known as “block time.” And “block time” is causing a long period of transaction approval. Remember that Litecoin improved these delays.
The crucial difference between Dagcoin model and blockchain is lack of “block time.” Dagcoin is storing transactions in Directed Acyclic Graph (DAG) chain. In DAG, every block has a signature of a user that created it and reference on parent units (previous transactions).
Is it complicated to understand? Well, maybe. But it validates blocks much faster – and making instant paying possible.
With blockchain, a rise in the number of users will mean less speed and higher costs. But with Dagcoin, the more transaction means faster processing time. And the full processing time of Dagcoin is 30 seconds.
Since it is friendly to small payments, the market will have a total supply of 9 billion dagcoins. Dagcoin has a different model, but the application is the same. The idea is to spread the usage and the acceptance of cryptocurrencies. And the Dagcoin is helping by introducing the alternative to everyday transactions.
If you need to validate whether someone is your relative, blockchain will be a great model to use. The number of relatives is limited, but the number of friends is not. So, if you are looking for a new friend, you can search for the common groups and the social proof using DAG chain.
Bitcoin is here to stay as digital gold. Litecoin improved transactions acting as silver. And Dagcoin made small payments possible. Choose the model that suits you based on the price, popularity and the number of interactions you are expecting.
Or by choosing the most reliable by gathering as much information as possible. We hope that we contributed to your ability to decide.