The beginning of September saw a shift in the mainstream financial approach to cryptocurrencies which could have a significant impact as time goes on. Late in August, Yahoo Finance announced that it would incorporate bitcoin, ethereum, and litecoin trading on its platform, according to Coin Telegraph. Prior to that, the platform offered statistics only. Currently, it also offers statistics on altcoins like bitcoin cash, ethereum classic, and EOS, although the trading capacity is limited to the prominent coins mentioned above. This development was heralded by some in the digital currency community as a crucial step toward the mainstream financial world’s adoption of digital currencies.
Four Cryptocurrencies Available for Trade
Besides BTC, ETH, and LTC, a fourth cryptocurrency has also been added to Yahoo Finance’s roster: . Dogecoin began as something of a gimmick, named after a popular meme reference. However, it has gone on to see real success as a digital token as well.
At the time of the announcement, cryptocurrency trading capabilities were available on Yahoo Finance’s iOS mobile app only, and not on the desktop version of the trading platform. However, Yahoo has indicated that it plans to include cryptocurrency trading on desktop, mobile web, and Android versions of the platform in the future.
In order to make the cryptocurrency trades possible, Yahoo partnered with trading hub Tradelt. Tradelt integrates with brokerage services in order to facilitate the trading of financial assets. Yahoo was not the first to seek out Tradelt’s services; Coinbase also partnered with the service in 2017.
For some in the Yahoo Finance world, the move toward cryptocurrencies has not been a surprise. Indeed, the financial news service first began its partnership with Tradelt back in September of 2017. At that point, Yahoo Finance offered users the opportunity to do in-app trading of traditional financial assets through the partnership. Up until September of this year, though, the exposure to cryptocurrencies was confined to data on prices and information on portfolio performance, according to Coin Desk. Yahoo Finance first began to track the price of bitcoin back in 2014 and it now covers more than 100 digital currencies across each of its platforms and around the world.
Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin and ripple.
A new from Forrester Research says the buzz around blockchain, a technology that creates tamper-proof records across multiple computers, is so over-hyped that some companies are dropping the word altogether.
According to Forrester, firms are ditching the b-word in favor of “DLT,” which is shorthand for distributed ledger technology—a more descriptive, if less catchy, term.
The report comes at a time when blockchain marketing is everywhere, including during the recent World Series, when IBM touted its blockchain services in TV commercials.
While blockchain is an important new technology, some firms are over-hyping its usefulness or simply repackaging existing services—a practice the report, which endorses the use of “DLT,” describes as “blockchain washing.”
“The networks that are live or under development vary greatly and frequently lack key characteristics that many regard as essential components of a blockchain,” the report states, adding the term blockchain can also carry negative “wild west connotations” of cryptocurrency.
The report, however, isn’t down on blockchain/DLT altogether, predicting that a “blockchain winter” may be looming, but that the technology is moving forward.
“On the tools and services side, we’ll witness steady but cautious progress. “Cautious” because DLT hasn’t proven to be a significant, reliable revenue stream for software and service providers, and 2019 won’t be any different,” the report says.
The fitful emergence of blockchain is similar in ways to other groundbreaking technologies like online shopping and cloud computing, both of which were the subject of unrealistic hype before later becoming mainstream.
Martha Bennett, a Forrester analyst and co-author of the report, cautioned that the parallel is not perfect as blockchain requires a level of cooperation among companies that the other technologies do not.
“There are parallels with the Internet but what’s different is that, with the Internet, a single company like Amazon or eBay can aspire to do something and create a big change. Blockchain is different because if one company says ‘I’m going to do something, it doesn’t matter. This is an eco-system play.”
The report also predicts that, in the near future, the most innovative work on blockchain will center on the tokenization of assets. Such tokenization, which doesn’t involve cryptocurrency, is already gaining traction in the real estate sector, where companies like Harbor are using distributed ledger technology to divide ownership in new ways.
As for the use of the term “blockchain,” the advocates for “DLT” face an uphill battle. A Google search for “blockchain” returns 215 million websites, while “distributed ledger technology” returns only 1.3 million.
There are so many cryptocurrencies now it’s hard to keep them straight. Bitcoin was the first cryptocurrency, which went live around 2009. Bitcoin uses blockchain technology to transact as an open source community network, without an official leader or administrator. So far it is the most widespread, most secure and has the most diverse participants out of all the cryptocurrencies. According to CoinMarketCap, by Monday bitcoin’s global market cap was worth more than $247 billion.
It is possible to argue and are the two altcoins, aka alternative coins, that are most similar to bitcoin. They have grassroots contributors that cooperate with nonprofit foundations without taking direction from them. Both the bitcoin and litecoin communities are experimenting with something called the Lightning Network, which creates a whole new layer for unprecedented features and cross-chain transactions. It will be a long time until this scaling solution is really implemented on the bitcoin network.
In the meantime, the important thing to remember about altcoins is they are not all bitcoin “rivals.” Litecoin and bitcoin have a symbiotic relationship. Some tokens serve very different functions altogether. There is no beef between monero and bitcoin, only between a few individual fans who may get in fights on social media. To the contrary, cryptocurrency communities often overlap and learn from each other.
Aside from bitcoin and its younger cousin litecoin, there are many other blockchain-based tokens with even more technical variations. Here are the top altcoins of the moment:
Ethereum appears to be the second-most diverse cryptocurrency network in the world. It launched around 2015. There are many cryptocurrencies that use the Ethereum network. Ethereum-based tokens are now a popular form of fundraising in the tech industry. But if someone refers to a token itself as “Ethereum,” they are probably referring to ether tokens, the network’s standard currency. According to CoinMarketCap, ether tokens currently sell for more than $1,099 a piece and the network’s global market cap exceeds $106 billion.
Unlike bitcoin, which was founded anonymously, the creators of both litecoin and Ethereum are publically involved with their respective projects. They have even become tech celebrities in their own right. “Ethereum is at this time the hands-down winner on sheer scale, due to first mover advantage, super effective marketing, and the savant-force of its founder, Vitalik Buterin,” Rik Willard, CEO of Global Blockchain Technologies Corporation and founder/managing director of a New York City-based federation of over 50 blockchain companies called Agentic Group, told International Business Times. Buterin is a Russian-Canadian developer who invented Ethereum when he was 19. He is now a leading member of the nonprofit Ethereum Foundation.
Ethereum’s biggest competition, although it is also a comrade in this game of tokens, may be the Chinese business-oriented cryptocurrency NEO. “I feel that NEO is being built for applications that are prepared to act as a seamless bridge to the future which may be opposed to some of the more ardent Ethereum purists who seem to want to build the future in a more immediate and disruptive sense,” Willard said.
If bitcoin is the gold standard of cryptocurrency, litecoin is the silver counterpart. If bitcoin is a hundred dollar bill, best suited for big purchases, litecoin makes up the coins and smaller bills. You can always break up a bitcoin into smaller pieces, just like you can go to a store and spend a $100 even if the clerk probably won’t enjoy handing out that much change. (You can buy a small fraction of a bitcoin!) Yet the reason silver and gold are better comparisons is because litecoin and bitcoin are still different cryptocurrencies.
Technically, litecoin and bitcoin are extremely similar. So it is easy for any payment processor or scaling solution that works with one currency to prove compatible with the other network as well. Litecoin was created by Google alumni Charlie Lee, who now works full-time developing the cryptocurrency to complement bitcoin. As of Monday, CoinMarketCap estimated a litecoin token sold for around $252 thanks to a global market cap well over $13 billion.
Charlie Lee invented litecoin, which works cheaper and faster than bitcoin. Photo: Charlie Lee
Monero is a privacy-centric cryptocurrency run by a grassroots community. It is socially very similar to bitcoin, with the added bonus of anonymous transactions. Another comparison to bitcoin is that it relies on cryptocurrency miners. Mining is what makes new tokens. Some cryptocurrencies, like Stellar and IOTA, are pre-mined. This means tokens are distributed and community members around the world don’t generally make new tokens. Some people believe the fact that both bitcoin and monero involve miners in the ecosystem makes these currencies more diverse and robust. CoinMarketCap estimates monero tokens are selling for roughly $380 with a market cap of almost $6 billion.
The San Francisco tech company Ripple makes a token called XRP, which sold on Monday for $2.51 per token with a market cap above $97 billion. Ripple recently tweeted that three of the world’s top five global money transmission companies “plan to use XRP in payment flows in 2018.”
The XRP network does not rely on miners like monero and bitcoin’s communities both do. This currency is largely controlled by the parent company Ripple. However, the company is investing heavily in community outreach and growing partnerships.
Ripple CEO Brad GarlinghousePhoto: Eric Piermont/AFP/Getty
Stellar came out around 2014 and established itself as a nonprofit foundation developing an open source project with the stated goal of enabling financial inclusion for marginalized communities. Theoretically, if we accept the idea that cheaper business transactions trickle down to increase access, this is slightly more aligned with the widely accepted values of decentralization. The network’s tokens are called lumen.
“This is a lot of the creators from Ripple who were unhappy with how the Ripple project went. And so they went off and they made Stellar, which means it shares some technical qualities,” Peter Van Valkenburgh, director of research at the nonprofit Coin Center, told IBT. “It’s a subjective or social-based mechanism where nodes create a list of those that they trust instead of it being proof of work [like bitcoin] or proof of stake.”
This is the fundamental difference between the bitcoin network and cryptocurrencies like XRP and Stellar. It’s almost as if XRP has a VIP guest list for the network validators it thinks are most important. If those nodes are compromised, the network is vulnerable.
A Stellar spokesperson told IBT that Stellar does not have the exact same node system as XRP. “Stellar instead uses a decentralized mechanism in which each validator chooses what are called quorum slices,” the spokesperson said in an email. “One big difference is that the system remains safe even if different people choose very different quorum slices. Hence, rather than a VIP list, every participant has its own idea of whom to depend on.”
To the contrary, the bitcoin network doesn’t have any guest list or slices. Everyone with the technical means to contribute can do so with equal access. You can literally operate a bitcoin node with a mobile satellite device and a power generator in the middle of nowhere, no Wi-Fi needed.
There are so many ways to access the bitcoin network, plus so many diverse contributors, that it offers a type of crowd-fueled security. These younger tokens have a long way to go until they could offer comparable security. Plus, there has been a lot of academic research into bitcoin’s theoretical properties. We know the many ways it is invulnerable to attacks. There has been far less peer-review of Stellar’s technical underbelly compared to bitcoin, Ethereum or even startup-driven altcoins like Zcash. It will take time to see how, if at all, these ecosystems mature.
Stellar is at least on its way. Stanford professor David Mazières is the chief scientist of the Stellar Development Foundation. According to Brit Yonge, cofounder of a startup called Lightyear.io that works with the Stellar network, Stellar was originally a fork of Ripple but it no longer shares any code with Ripple at all.
Great 20 minute video by @dmazieres on the @StellarOrg Stellar Consensus Protocol. https://t.co/sy69fuP6rp
— Lisa Nestor (@nestorious828) December 19, 2017
Regardless, Stellar is still an institutional financial services network with a bottleneck source of token distribution, the foundation itself. Lumen is a pre-mined token. “At the genesis of the Stellar Network, 100 billion lumens (XLM) were created as specified in the protocol,” Yonge told IBT. “As part of its custodial mandate, the Stellar Development Foundation is entrusted to oversee that the vast majority, 95 billion, of the lumens are distributed to the world.”
Yonge said the Stellar network could be adopted by financial institutions around the world. “This would be mean payments between licensed money service businesses on behalf of someone sending money home from France to Philippines or India, would clear and settle in almost real-time,” he told IBT. Companies such as IBM, Deloitte, and the Kik Foundation are all experimenting with Stellar. On Monday, lumen sold for roughly $0.65 each, supporting a market cap of more than $11 billion.
“Stellar and Ripple are still blockchains under the hood,” Bitcoin Core developer Peter Todd told IBT. “The question is really how do they come to consensus. That is the one overarching difference. Ripple, the way that they do it is slightly more centralized. Stellar kind of hides that a little. But it is still ultimately centralized because of the ‘you need unique node lists’ question. There’s really not that much difference [compared to bitcoin] except for this massive consensus issue.”
Celebrating with our new @StellarOrg partner @GOPAX_kr in Seoul, Korea #blockchain#fintech#cryptocurrencyhttps://t.co/7vDZVmNVKUpic.twitter.com/5g1w5Fv0pk
— Stellar (@StellarOrg) December 6, 2017
Right now the American market is really fixated on the controversy surrounding Ripple, the cryptocurrency industry’s newest Silicon Valley giant. But Willard is more interested in global blockchain trends. Africa and Asia are home to some of the most impactful aspects of this new cryptocurrency market.
“I think that the question of Cardano vs. XRP vs. NEM, while valid, is somewhat limiting and reflective mostly of the worldview of the West-leaning banking community, that is to say, incumbents,” Willard told IBT. “I’m much more interested in the looming standoff between Ethereum and NEO, either of which may well produce the platform winner for the development of PoS-based dApp ecosystems.”
It is still early to say how issues such as basic security and scalability will play out for all these cryptocurrencies. There are many stars that need to align in order for these platforms to gain significant mainstream traction. Only time will tell which tokens will survive the decade.
Update: This story was updated to include feedback from Stellar about how their system is different from the XRP ledger. The Stellar team also claims their network can be used to trade any type of asset, from dollars to niche startup tokens.
Explore the influence of Ethereum blockchain technology and learn how it could benefit your business.
With business owners become increasingly reliant on technology, some have turned to electronic currency. Bitcoin is an electronic, peer-to-peer, decentralized, distributed cash system, and it is the first firm and reliable example of a digital asset. Bitcoin utilizes the blockchain technology to flow and live across millions of international networks, storage technologies, participants and devices across the globe.
Bitcoin is not really a coin; it is a new kind of currency that lives on the internet. Bitcoin is powerful, and it is both a payment network and a currency. It has a very fast transfer speed. With the click of a button, you can receive or make payment from anywhere across the globe.
The power it possesses is far beyond the dollar because it is not a physical currency, and the dollar is also not a payment network. On the other hand, Visa and PayPal are not currencies, but they are payment networks. Let’s dive into the impact of these different technologies on businesses and consumers around the world.
Understanding world-changing technology known as blockchain
The technology behind blockchain is one of the best technologies the world has experienced. As a result of this, blockchain app development is on the rise, providing better blockchain solutions. Blockchain is a distributed ledger technology, a transactional database that is shared worldwide and enables various parties to agree upon, maintain consensus contracts and carry out transactions among entities that don’t trust or know one another.
It was given the name “blockchain” because it is made up of several transactions groups called “block” that are distributed and executed among participating nodes. The word “blockchain” is derived as a result of the linear sequence the blocks form. Fundamentally, all the blocks are cryptographically linked to each other in a very secure, anonymous and private way.
Ethereum was founded by Vitalik Buterin, and is a decentralized platform that runs smart contracts. To get a better understanding of Ethereum, you need to understand the philosophy of Buterin. He believes the new currency trends are the way of the future. If you’re a business, you either join in or get left behind.
Ethereum is well-known not just because it is one of the biggest cryptocurrency assets in crypto exchanges and markets, or because it has a significant amount of crowdfunded money, but rather because of its similarities to bitcoin.
The valid centralized control skepticism gave birth to Ethereum. Buterin observed that blockchain design and the protocol of bitcoin is what made it powerful and decentralized. Ethereum relies on the central appeal of bitcoin with the aim of achieving things that are far beyond money. Ethereum is awfully powerful, and it goes way beyond monetary transactions.
What is Ethereum blockchain technology?
With the help of Ethereum blockchain technology, the parties involved in transactions and agreements can use smart contracts to encase all the processes and rules of the transactions. After the successful execution of all transactions or agreements, the smart contract immediately carries out actions and initiates compliance checks. These checks are based on the rules defined and encoded in the smart contract. All these processes are carefully implemented during the blockchain app development phases to find better blockchain solutions.
Ethereum goes beyond cash
Ethereum’s backbone is enbabling anyone from anywhere in the world to reason and encode secure smart contracts. A smart contract is a decentralized app, and it has its unique ownership rules, state transaction functions and transaction formats.
This is exactly what the founder of Ethereum had in mind when creating the platform – a distributed computing platform that features smart contract functionalities with a very secure cryptographic. It is crucial to know an Ethereum smart contract is initiated by a payment in Ether (the native cryptocurrency of Ethereum). This digital concept is just like putting your cash in a vending machine.
When buying a soda, you put coins into the machine. The different compartments and functions inside the machine then store your money to keep it safe from criminals.
Decentralized applications for almost every industry across the globe
Ethereum is used as a platform for developing decentralized applications in addition to its secure and decentralized technology. The platform allows you to run experiments all by yourself. Whoever you are, wherever you are, you can verify and execute smart contract codes for whatever that can be agreed upon. Ethereum blockchain has offered better blockchain solutions to a lot of industries in the world. This is why the need for blockchain app development companies is on the rise. If you’re interested in using blockchain technologies for your business, Ethereum could be a place to look.
The range of possible decentralized apps that can be built in blockchain is really broad and extends to most popular industries. Banks, governments and companies are interested in pouring money into blockchain technology. Regardless, it is important you know that there are certain limitations.
Engage your partners and customers
Frequently, it can take up to a couple of weeks or even months for a paper contract to reach a final agreement. In the case of global companies, you might also be required to journey from one nation to another in order to be rejected or accepted. This why smart contracs are very important and powerful – as they provide a great solution to automate transactions and agreements. This is why blockchain app development is very important and encouraged across the globe as it offers first-hand blockchain solutions. The added convenience and time saved can be crucial for businesses.
The goal of the technology behind blockchain is to automate the exchange of value-making transactions and agreements, while also making them secure, efficient and smooth for the various entities involved. Another beneficial feature of this platform is that you can configure the platform to execute at any given time or when a particular event takes place.
Learning more about blockchain technologies in coming weeks, months and years can provide value to business owners. Remaining aware of trends and how those trends can benefit your business can be the difference between sustained success and a floundering company.