Before we discuss the crypto-currencies that will replace bitcoin, here is a brief explanation of what the terms “crypto-currency” and “altcoin” mean. Crypto-currencies, broadly defined, are virtual or digital currencies in the form of tokens or “coins”. While some crypto-currencies have entered the physical world through credit cards and other items, the vast majority remain completely invisible.
Crypto-currencies are usually code developed by a team and incorporate issuance mechanisms (usually through a process called “mining”) and other controls.
Overall, crypto-currencies are designed to escape government manipulation and control, but as their popularity increases, a fundamental aspect of the industry is under attack. Crypto-currencies modeled on bitcoin are called altcoins, or in some cases bitcoins, and are designed to appear as modified or enhanced versions of bitcoin. While some of these currencies have impressive features that bitcoin does not have, alternative currencies have not yet reached the level of security achieved by the bitcoin network.
Here are some of the most important digital currencies outside of bitcoin. First of all, a word of warning: it is impossible to cover such a list completely. One reason for this is that as of January 2021, more than 4,000 crypto-currencies exist. Many of these crypto-currencies have few or no followers or trading volume, but some are very popular among a dedicated community of supporters and investors.
Moreover, the field of cryptocurrencies is growing rapidly, and the next big digital token could be announced tomorrow. While bitcoin is widely known as a pioneer in the crypto-currency world, analysts have taken a different approach to value tokens beyond BTC. For example, analysts typically place a lot of emphasis on the coin’s ranking relative to its market capitalization.
Bitcoin has collapsed for the first time in more than seven weeks, just days after hitting a record high.
The largest cryptocurrency fell 9 percent to $55,323 around 9:30 a.m. in New York on Sunday, while it lost as much as 15 percent to $51,707 the same day in Asia.
Other crypto-currencies are also struggling. Ether, the second-largest cryptocurrency, cut its losses after falling 18% to below $2,000, according to CoinGecko.com, while the cryptocurrency’s total market capitalization, which recently surpassed $2 trillion, has fallen back to around $1.96 trillion. And Dogecoin, the coin that started as a joke in 2013, has been trading around 29 cents lately after hitting 40 cents on Friday.
According to some online reports, the plunge is due to speculation that the US Treasury Department will crackdown on the use of digital assets for money laundering.
Bitcoin hit a new all-time high of $64,869 last week before crypto-currency exchange Coinbase Global Inc. made its debut on the Nasdaq exchange on Wednesday. Coinbase ended its first week of trading on a high note, garnering bullish ratings from Wall Street analysts.
Driven by the likes of Elon Musk and Mark Cuban, Dogecoin rose more than 110% on Friday before falling the next day. Demand for Dogecoin was so strong that investors trying to trade on Robinhood crashed the site, the online exchange said in a blog post Friday.
“The crypto-currency world woke up today with a bit of pain,” said Anthony Trenchev, co-founder of crypto-currency financier Nexo.” Dogecoin’s 100% gain on Friday was a “spike party” after Bitcoin’s record high and Coinbase’s IPO earlier in the week. And usually in the crypto-currency world, when that happens, there is a price to pay. “
In addition to “unconfirmed” reports of a crackdown by the US Treasury, Trenchev attributed the decline to “excessive leverage, Coinbase insiders selling their shares directly after the IPO, and the massive bankruptcy of bitcoin miners in China’s Xinjiang Uyghur Autonomous Region”.
Elon Musk and cryptocurrencies
The price of Bitcoin plummeted on Friday morning after Elon Musk posted a tweet suggesting that he had lost his love for the world’s first cryptocurrency.
The billionaire Tesla CEO tweeted a meme about a couple breaking up after a man quoted lyrics from Linkin Park with the hashtag #bitcoin and a broken heart emoji.
The cryptocurrency rose slightly but remained in the red after Square CEO Jack Dorsey tweeted on Friday morning that the digital payments company was considering creating a hardware wallet for Bitcoin.
Bitcoin was down 4.3 percent to $36,925.74 as of 4:03 p.m. ET on Friday, according to Coin Metrics. Other digital currencies followed suit, with Ethereum, the second-largest cryptocurrency, down 3.6 percent to $2,694.92, and Dogecoin, Mr. Musk’s favorite cryptocurrency, down 1.7 percent to 38 cents.
Bitcoin has had a turbulent year, hitting an all-time high of more than $64,000 in April before falling back to nearly $30,000 the following month. It has fallen more than 40 percent from its all-time high but has risen nearly 30 percent since the start of 2021.
This isn’t the first time Musk’s tweets about cryptocurrencies have caused a stir in the markets. In May, Tesla said it would no longer accept Bitcoin as a payment method due to concerns over energy consumption, devaluing the entire cryptocurrency market by hundreds of billions of dollars in a single day.
Some in the cryptocurrency industry have criticized Musk’s message on digital currencies in the past. For example, Musk regularly tweets about the cryptocurrency “joke” dogecoin, whose price often fluctuates wildly.
After his latest tweet about Bitcoin, Binance CEO Changpeng Zhao was unhappy. Binance is the world’s largest cryptocurrency exchange by trading volume, according to CoinMarketCap.
“Tweets that hurt others financially are not funny and are irresponsible,” Zhao, known as “CZ” in cryptocurrency circles, tweeted on Friday.
Mr Musk’s Twitter posts have also had an impact on non-crypto currency assets. On Wednesday, shares in Samsung Publishing, a major shareholder in the maker of Baby Shark, surged after Mr. Musk posted a tweet about a popular nursery rhyme.
His tweet drew the ire of the US Securities and Exchange Commission, which charged Mr. Musk and his electric car company with stock fraud after the CEO tweeted that he would take the company private in 2018 and raised “certainty of funding” to do so.
This week, the SEC is said to have disciplined Mr. Musk for allegedly breaching the terms of a settlement agreement with the securities regulator. SEC officials seized on a tweet from Mr. Musk last May in which he said Tesla’s share price was “too high”.
Another difference between Dogecoin and Bitcoin lies in the premise on which each was created.
Bitcoin was launched in 2009 with a highly detailed whitepaper written by Satoshi Nakamoto, the creator of Bitcoin. Satoshi Nakamoto intended for Bitcoin to become the leading decentralized digital currency. Bitcoin’s supporters see the cryptocurrency as digital gold, a hedge against inflation.
Over the course of its 12-year history, institutional and private investors have grown increasingly confident in Bitcoin, resulting in the cryptocurrency selling at record prices this year.
Dogecoin, on the other hand, was created by software engineers Billy Markus and Jackson Palmer as a joke in 2013. Inspired by the “Doge” meme depicting a Shiba Inu, Markus and Palmer didn’t want to take dogecoin seriously.
In a recent post on Reddit, Markus wrote that it was “made for idiots.” I threw it together with no expectations or plans. It took about three hours to complete.”
As a result, dogecoin has not been able to develop the technology to make it as secure as Bitcoin.
Over the years, Markus has been amazed at how fast the dogecoin community has grown, bonding over their shared love of Shiba Inus. More recently, the cryptocurrency has exploded thanks to the social media exploits of the likes of Musk and Mark Cuban.
“‘Dogecoin’ is kind of an inside joke at the moment,” says Ledbetter.
But “for many people, investing has become a form of entertainment,” says DeMello.” In the case of Dogecoin, the meme is the message.