The hype surrounding the Bitcoin and the increase in its value by sixty times since the start of this year, made lot of people to realize the importance of digital currencies. Even governments and central banks around the world are analyzing their viability as standard alternatives to the regular legal tender money. Acceptance of digital currencies too its improving fast. Businesses, small shops and even some restaurants around the world are now accepting digital currencies like Bitcoin. The popularity of Bitcoin resulted in the evolution of many similar digital currencies. It is now clear that digital currencies have a glorious future in a connected world, even if Bitcoin crashes. Below is the list of top 3 alternatives to Bitcoin you should know about:
Litecoin
Litecoin is the second most popular digital currency in the world after Bitcoin. Created in the year 2011 by Charles Lee, Litecoin is based on the same protocol of Bitcoin but differs from the later in many respects. The first difference is the more number of Litecoins that can ever be in circulation. Maximum limit on the number of Litecoin currency units is 84 million. This is four times to the limit for Bitcoins (21 million). Each Litecoin is further divided into 100,000,000 units. Unlike Bitcoin which needs powerful computers to be mined, Litecoins can be mined by normal computers. This make Litecoin transactions four times faster than those using Bitcoin. Value of Litecoin has not increased much in the recent past and hence is still affordable to more number of people. The ease with which Litecoin can be managed and the higher limit to the number of currency units that can be created make it the most likely digital currency of the future in the event of Bitcoin crash.
Peercoin
Peercoin is another digital currency that was inspired by Bitcoin. Peercoin was created by the software developer Sunny King in the year 2012 and uses the same software protocol of Bitcoin. A big difference between Peercoin and other digital currencies is that there is no limit on the number of Peercoins that can be created. This feature make it more scalable in future depending upon the need. Peercoin system was developed in a way that its will have a 1 percent annual inflation. This simply means that the value of Peercoins held by a person will keep increasing by one percent every year irrespective of any buying and selling he/she makes. A big con for Peercoin is the high transaction fee of 1 percent which makes it expensive to use as a currency for regular monetary transactions. Like Bitcoin and Litecoin, Peercoin transactions are irreversible which is still a big limitation for all digital currencies.
Anoncoin
Anoncoin is another latest digital currency introduced in the market in June 2013. Anoncoins were released into the market as an open source software project by a group of privacy obsessed software developers. It is based on Litecon and uses open source encryption without any central authority to administer it. As the names implies, Anoncoin offers more anonymity than the other popular currencies. Anoncoin has support for I2P (darknet) and its transactions are almost impossible to trace even by the law enforcement authorities. The maximum number of Anoncoins that can be ever issued is just 4.2 million. This limit can make them more scarce than Bitcoins. Each Anoncoin is subdivided into 280,000,000 sub units. Higher anonymity and limited supply can make Anoncoins a more niche digital currency used by a limited number of people rather than a true alternative to Bitcoin.
Apart from the above top 3 alternatives, there are lot of other popular digital currencies introduced in the market like Namecoin, Zerocoin, and Primecoin. The very nature of international transactions that these digital currencies are meant to facilitate mean that all of them can’t survive in the long-term. Digital currencies with stable values and better security will be widely adopted by people and governments around the world.
