With the success, interest and uptake in Bitcoin it didn’t take long for different uses of the technology to appear, alternatives to Bitcoin with different purposes. These Altcoins tend to be based on the same initial premise as Bitcoin, a peer-2-peer digital currency that involves being mined and utilises a blockchain; but each have their own unique selling point that the creators believe is of value.
For some investors, Altcoins are an opportunity to make huge returns on meagre investments and have been likened to penny shares in the traditional stock market. One example of that is Ripple (XRP). Ripple is an Altcoin that was designed to utilise blockchain technology for transfers of money to be made online.
It is of particular use when different currencies are used in a transaction, rather than paying multiple currency conversion fees, Ripple’s coin XRP can be used to simplify, substantially speed up and reduce the cost of the transaction. This has advantages for individuals, businesses and even traditional banking institutions.
However, Ripple often comes under attack from crypto evangelists as it isn’t decentralised, it is owned by a single company that controls the entire system, plus, unlike Bitcoin’s relatively low hard cap of just 21 million coins, Ripple has already released 38 billion and intends to reach 100 billion in total.
However, none of that stopped Ripple achieving a simply staggering 35,000% increase in price in 2017. Yes, you did read that right, and no, that isn’t a typo. For every £100 of Ripple you bought on January 1, 2017 you’d have £35,000 on December 31, 2017.
Since reaching an all time high of $3.84 on January 4, Ripple then slid rapidly down almost 50% and has been hovering at around $1.90 since. Ripple was the top performing Altcoin in 2017 and currently sits in third position as the most successful crypto-currency based on market cap.
…none of that stopped Ripple achieving a simply staggering 35,000% increase in price.
Other notable Altcoins that experienced a meteoric rise in value in 2017 include Ethereum, Dash and Litecoin.
- Ethereum uses a decentralised blockchain to host smart contracts, small software applications that can be used by a whole host of new and existing businesses. 2017 movement of 9,382%
- Dash is very similar to Bitcoin but has the option to anonymise transactions to keep them private, as well as to perform near instant transactions without the need for waiting for confirmations, a distinct advantage over slower networks. 2017 movement of 9,281%
- Litecoin is seen as an improvement over Bitcoin by providing a 75% faster process to produce a block; 2.5 minutes as opposed to 10 minutes which speeds up transactions. Litecoin also uses a different hashing algorithm which again speeds up transactions. 2017 movement of 5,260%
So what’s on the cards for 2018? Many supporters of digital currency believe that Altcoins are massively overvalued, such big increases in value with no apparent cause are systemic of a price bubble caused by everyman investors wanting to get rich quick; however many others believe this is only the start of the price rises and that 2018 will see prices of all digital currencies soar even higher. One thing is for sure, 2018 is set to be interesting.
Dean Graham is a Director of Stonebow Media and an amateur enthusiast in crypto-currency. This column in no way represents investment advice or a recommendation from the author or the publication.