SEVERE WX : Flood Warning View Alerts

Beyond bitcoin: the other cryptocurrencies you should know too

Bitcoin may be the most popular form of digital currency but it's far from the only one.In fact, abou...

Posted: Nov 21, 2018 12:18 AM
Updated: Nov 21, 2018 12:18 AM

Bitcoin may be the most popular form of digital currency but it's far from the only one.

In fact, about 1,500 other cryptocurrencies have emerged since the creation of bitcoin in 2009. And they fall into buckets like stable coins and tokens.

Banking, finance and investments

Bitcoin

Business and industry sectors

Business, economy and trade

Computer science and information technology

Currencies

Digital currencies

Economy and economic indicators

Financial markets and investing

Financing and stock offering

Mobile apps

Mobile technology

Money, banknotes and coins

Securities trading

Software and applications

Stock markets

Technology

Coupled with the lack of clear regulations or oversight and how new the space is, it's enough to leave any crypto newcomer completely confused.

Crypto is valued by investors because it's not regulated by any central figure. It's also exchanged pseudonymously, which allows for greater privacy.

While it was originally used for illicit transactions, it's gained wider adoption. Even companies like Overstock and Starbucks have started experimenting with how to let customers use it to shop.

Investing in crypto is still risky and volatile -- let's recall bitcoin's infamous rise in value to $20,000 late last year and its current price of under $5,000.

Because of this, knowing the core differences is worth your time.

Coins vs. Tokens

First, you'll want to know the difference between coins and tokens. Coins are essentially virtual cash used for many types of transactions. They're bought and sold over numerous different crypto exchanges, including Coinbase, bitbuy.ca and Binance. The first recorded bitcoin transaction was for two pizzas.

Tokens represent assets or anything that has value ascribed to it. For example, tokens can be used to represent things like the ownership of a piece of art or the number of rewards points a customer has in a company's loyalty program. They both have value and rely on blockchain technology, a digital ledger of transactions that can't be erased. But a coin is virtual money and a token is not.

Bitcoin and Alt Coins

Bitcoin was the original form of cryptocurrency -- and it's the coin others are compared to.

"Bitcoin is the mother crypto," said Marshall Hayner, founder of Metal Pay, an app that's much like Venmo for crypto.

Not surprisingly, its emergence sparked the rise of copycats, including alternative coins like litecoin, XRP and ether.

Ether is used to power its own unique blockchain called Ethereum -- one of the biggest creators of smart contracts. These contracts use cryptographic code to verify and trigger transactions when certain conditions are met. For example, a smart contract could be set to pay out a certain amount of crypto at 1:00 p.m. on a specific day.

Another bitcoin alternative is XRP, which was built to make it easier for banks and payment processors to make cross-border payments. It's one of the most popular cryptocurrencies.

There are also obscure alternatives, like dogecoin, which was created as a joke based on a viral meme of a Shiba Inu. The dog's face is displayed on the front of the virtual coin. The currency is commonly used on social media to tip users who post interesting things.

Dogecoin has helped many people learn about and dabble in trading cryptocurrencies because its community tends to not take itself too seriously and is very friendly to new investors.

Stable Coins

Stable coins are pegged to actual currencies like the US dollar, the euro or the British pound. That means that one dollar or pound gets you one crypto coin. These coins are designed to mimic actual currencies and tend to be less volatile than other cryptocurrencies.

Tether was one of the first stable coins.

"The idea behind tether is you give a dollar and you get one tether," Hayner said.

But there's still risk, according to Ryan Taylor, CEO of the cryptocurrency Dash. Their value can erode over time similar to fiat currencies like the US dollar.

Other recent stable coins are more transparent. For example, TrueUSD complies with some standard financial regulations and uses escrow accounts.

Utility Tokens

Utility tokens represent a certain service or good on a specific platform -- kind of like a gift card to a specific store. They aren't really investments but they have value.

Hayner likens them to casino chips: When you go to a casino, you exchange your dollars for chips and then can use those chips to play games. The chips serve a function because they allow you to do something and hold value but you have to exchange them to get actual cash.

Taylor said he was skeptical of most utility tokens because they aren't the best way to interact with users. They require additional steps that make them more complicated to use and that could turn some people off.

However, he noted that they do make it possible to transact in extremely small quantities.

Security Tokens

Security tokens are still relatively new. Their value is derived from real-world assets, which could include commodities like gold or oil, shares of a company or interest in a fund. These tokens are meant to be investments and because they're considered securities and subject to federal security regulations.

Some fans of security tokens argue they would ensure greater accountability for companies because shares would be public and couldn't be over-issued.

Both Hayner and Taylor say these tokens are still a ways off from showing up in people's portfolios because of uncertainty around how they'd be regulated.

And according to Stephen Innes, head of trading in Asia Pacific for online trading platform Oanda, security tokens still don't provide enough of a "consistent metric off which to base an underlying investment strategy."

Security tokens, which would be regulated, also go against the very core of what crypto was meant to be -- a deregulated currency. But regulations would be a draw for investors.

Non-Fungible Tokens

Non-fungible tokens have a unique value or use. They can store value but no two tokens are the same.

For example, in the video game CryptoKitties, users can use ether to buy digital cats. The digital kitties can be traded and bred, but each has its own unique non-fungible token that can't be replicated -- kind of like a digital fingerprint.

Future of money?

Digital currency is becoming more mainstream as companies like Starbucks and Goldman Sachs experiment with how to engage with it.

It's unclear whether crypto will be the future of money, but it's volatility isn't helping its case for wider adoption. As values continue to drop and rebound, investors continue to show caution.

"There's a lack of adoption on Wall Street," Innes said. "The big banks that most people are doing business with are reticent to get involved, which I think is telling."

West Lafayette
Partly Cloudy
72° wxIcon
Hi: 73° Lo: 41°
Feels Like: 72°
Kokomo
Clear
65° wxIcon
Hi: 69° Lo: 41°
Feels Like: 65°
Rensselaer
Partly Cloudy
64° wxIcon
Hi: 69° Lo: 39°
Feels Like: 64°
Fowler
Partly Cloudy
72° wxIcon
Hi: 70° Lo: 42°
Feels Like: 72°
Williamsport
Partly Cloudy
67° wxIcon
Hi: 70° Lo: 40°
Feels Like: 67°
Crawfordsville
Partly Cloudy
66° wxIcon
Hi: 69° Lo: 38°
Feels Like: 66°
Frankfort
Clear
66° wxIcon
Hi: 68° Lo: 41°
Feels Like: 66°
Delphi
Clear
66° wxIcon
Hi: 69° Lo: 40°
Feels Like: 66°
Monticello
Clear
66° wxIcon
Hi: 71° Lo: 39°
Feels Like: 66°
Logansport
Clear
64° wxIcon
Hi: 68° Lo: 40°
Feels Like: 64°
Warming Up, Unsettled Weekend
WLFI Radar
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 732692

Reported Deaths: 13450
CountyCasesDeaths
Marion1002531746
Lake53931975
Allen40779678
St. Joseph35838552
Hamilton35695408
Elkhart28695442
Tippecanoe22419219
Vanderburgh22332397
Porter18838309
Johnson18007379
Hendricks17269315
Clark13007191
Madison12708339
Vigo12470248
LaPorte11970212
Monroe11914170
Delaware10720186
Howard9946216
Kosciusko9438117
Hancock8310141
Bartholomew8078156
Warrick7789155
Floyd7672178
Grant7072174
Wayne7061199
Boone6712101
Morgan6593139
Dubois6162117
Marshall6073111
Cass5826105
Dearborn581878
Henry5758103
Noble562784
Jackson502773
Shelby493196
Lawrence4563120
Harrison436372
Gibson436092
DeKalb429285
Clinton427953
Montgomery425089
Whitley397139
Huntington392980
Steuben389457
Miami382267
Knox372690
Jasper368248
Putnam361660
Wabash354580
Adams341954
Ripley340170
Jefferson331281
White314854
Daviess298199
Wells291881
Decatur285492
Fayette281262
Greene279785
Posey271933
LaGrange267870
Scott266954
Clay260547
Washington241632
Randolph241181
Spencer232431
Jennings230449
Starke217154
Fountain213046
Sullivan212042
Owen201956
Jay196330
Fulton195540
Carroll189420
Orange184154
Perry183537
Rush173725
Vermillion169643
Franklin168435
Tipton163045
Parke146416
Blackford135132
Pike134934
Pulaski116945
Newton108134
Brown102441
Crawford100615
Benton98914
Martin89015
Warren82215
Switzerland7938
Union71010
Ohio57111
Unassigned0417

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events