What is the next big thing after Bitcoin ?
In the year 2017 alone, the price of Bitcoin has hiked from $1,000 in January to more than $10,000 in the early December. It has managed to earn a market capitalisation of more than $167 billion. This surprise price hike has attracted others to manufacture different cryptocurrencies competing for dollars.
Bitcoin is a digital currency which is not physically present. It can only be transferred from one internet user to another. It runs on a technology known as blockchain. A blockchain functions by recording financial transactions on a shared digital ledger, which is encrypted on a peer-to-peer network. The advantage of blockchain is that they do not depend on large financial institutions or centralised servers to issue payments. The blockchain is operated by thousands of computers or “nodes” worldwide. With advances in cryptography, the financial information has become more secure and anonymous. Hence, tracking any person involved is impossible.
The blockchain is considered as a world-changing technology, that in future is sure to shake up the highly centralised and fee based financial system. Investors are ready to throw large amount of money to get to the ground work of this potentially revolutionary technology. And it is not only Bitcoins they are investing in, there are many other cryptocurrencies in the market which are collectively called as ‘altcoins’ (meaning Bitcoin alternative). Skeptics have started complaining this to dot-com bubble.
Is Ethereum the next big thing ?
Without blockchains cryptocurrencies cannot exist. The impact of distributed blockchain infrastructure is predicted to be much more than an individual cryptocurrency. Hence the blockchain enthusiast are going crazy over the Bitcoin alternative, Ethereum.
Ethereum is not only a cryptocurrency. It provides the platform for developers to build applications that run on blockchain. Just like Bitcoin, Ethereum also has its own designed programming language, but it is way more advanced, powerful and versatile than Bitcoin. Bitcoin was manufactured, keeping in mind an idea of replacing conventional money. But Ethereum has no such goals. Its job is to simply provide a more secure transaction on blockchain.
Ethereum has its own cryptocurrency named Ether. But it can be only useful when you are working on ethereum platform. So you cannot use Ether to buy Xbox games, but you can do it with Bitcoin.
It is believed that Bitcoin’s position at the top is not permanent anymore. With the introduction of Ethereum’s programming language. It has made it very easy for startups and developers to create decentralized apps, that are expected to empower individuals and business in new ways altogether. The most amazing invention under this is the idea of ‘smart’ contracts. The smart contracts help you to program a deal on blockchain, which eradicates the need for paying lawyers to do so.
Microsoft is often reported as taking advantage of this facility. The company often moves the contracts from real world properties like office buildings to blockchain in order to avoid the costly legal disputes.
Ethereum is also designed to provide programmable money. For example at University of Illinois, there’s a college students bank account, which are programmed according to their parents’ will. Like a student can withdraw only upto $100 for a week’s expense and anything beyond that requires and authorisation from the parents. It is believed that this technology will quickly spread to other mainstream banking.
Hence, there’s a huge scope for development in the field of cryptocurrencies in the future.