Comparing Bitcoin, Ether, & Other Cryptos

Unless you’ve been hiding under a rock, you’re probably aware that we’re in the middle of a cryptocurrency explosion. In one year, the value of all currencies increased a staggering 1,466% – and newer coins like Ethereum have even joined Bitcoin in gaining some mainstream acceptance.

And while people like Jamie Dimon of J.P. Morgan and famed value investor Howard Marks have been extremely critical of cryptocurrencies as of late, many other investors are continuing to ride the wave. As Visual Capitalist's Jeff Desjardins has noted in the past, the possible effects of the blockchain cannot be understated, and it could even change the backbone of how financial markets work.

However, even with the excitement and action that comes with the space, a major problem still exists for the layman: it’s really challenging to decipher the differences between cryptocurrencies like Bitcoin, Ethereum, Ethereum Classic, Litecoin, Ripple, and Dash.

For this reason, we worked with social trading network eToro to come up with an infographic that breaks down the major differences between these coins all in one place.

(click image for massive legible version)

Courtesy of: Visual Capitalist

A DESCRIPTION OF MAJOR COINS

Here are descriptions of the major cryptocurrencies, which make up 84% of the coin universe.

BITCOIN

Bitcoin is the original cryptocurrency, and was released as open-source software in 2009. Using a new distributed ledger known as the blockchain, the Bitcoin protocol allows for users to make peer-to-peer transactions using digital currency while avoiding the “double spending” problem.

No central authority or server verifies transactions, and instead the legitimacy of a payment is determined by the decentralized network itself.

Bottom Line: Bitcoin is the original cryptocurrency with the most liquidity and significant network effects. It also has brand name recognition around the world, with an eight-year track record.

LITECOIN

Litecoin was launched in 2011 as an early alternative to Bitcoin. Around this time, increasingly specialized and expensive hardware was needed to mine bitcoins, making it hard for regular people to get in on the action. Litecoin’s algorithm was an attempt to even the playing field so that anyone with a regular computer could take part in the network.

Bottom Line: Other altcoins have taken away some of Litecoin’s market share, but it still has an early mover advantage and some strong network effects.

RIPPLE

Ripple is considerably different from Bitcoin. That’s because Ripple is essentially a global settlement network for other currencies such as USD, Bitcoin, EUR, GBP, or any other units of value (i.e. frequent flier miles, commodities).

To make any such a settlement, however, a tiny fee must be paid in XRP (Ripple’s native tokens) – and these are what trade on cryptocurrency markets.

Bottom Line: Ripple runs on many of the same principles of Bitcoin, but for a different purpose: to serve as the middleman for all global FX transactions. If it can successfully capture that market, the potential is high.

ETHEREUM:

Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralized applications.

In the Ethereum blockchain, instead of mining for bitcoin, miners work to earn ether, a type of crypto token that fuels the network. Beyond a tradeable cryptocurrency, ether is also used by application developers to pay for transaction fees and services on the Ethereum network.

Bottom Line: Ethereum serves a different purpose than other cryptocurrencies, but it has quickly grown to displace all but Bitcoin in value. Some experts are so bullish on Ethereum that they even see it becoming the world’s top cryptocurrency in just a short span of time – but only time will tell.

ETHEREUM CLASSIC:

In 2016, the Ethereum community faced a difficult decision: The DAO, a venture capital firm built on top of the Ethereum platform, had $50 million in ether stolen from it through a security vulnerability.

The majority of the Ethereum community decided to help The DAO by “hard forking” the currency, and then changing the blockchain to return the stolen proceeds back to The DAO. The minority thought this idea violated the key foundation of immutability that the blockchain was designed around, and kept the original Ethereum blockchain the way it was. Hence, the “Classic” label.

Bottom Line: As time goes on, Ethereum Classic has been carving out a separate identity from its bigger sibling. With similar capabilities and a different set of principles, Ethereum Classic could still have upside.

DASH:

Dash is an attempt to improve on Bitcoin in two main areas: speed of transactions, and anonymity. To do this, it has a two-tier architecture with miners and also “masternodes” that help the network perform advanced functions such as near-instant transactions and coin-mixing to provide additional privacy.

Bottom Line: The innovations behind Dash are interesting, and could help to make the coin more consumer-friendly than other alternatives.

BONUS: BITCOIN CASH

Although not included in the graphic, we also wanted to add a quick word on Bitcoin Cash. This new currency “hard forked” from Bitcoin about a month ago, as a result of miner disagreements about the future of Bitcoin. Here’s a detailed summary of the announcement.

Comments

giovanni_f Fri, 09/15/2017 - 02:54 Permalink

Monero. Just money. Private. No overhyped new-age-enrichment scheme. Forget the rest.(Yes, I know, it has no intrinsic value, and yes, it can go to 0, and yes, I know, it can be outlawed)

doctor10 beemasters Fri, 09/15/2017 - 07:15 Permalink

Traditional currencies really aren't worth all that much in a surveillance society -which essentially all big governments are today. All opportunity for arbitrage is stolen by the sociopsyopaths pre-occupied with going through everybodies bank accounts, real estate holdings, telephone and email records, tax returns and health records seeking "opportunity".

Not much business can be done profitably. At the end of the day its why interest rates -at least in 100% traceable accountable taxable regulatable and ultimately takable currencies are basically 0% give or take a few fractions of a percent-worldwide.

FWIW if you want to borrow BTC now interest rates can be 12-13%!!

"value" is anonymity and privacy in conduct, thought and action-one of the consequences of which is enhanced ability to keep the fruits of your own labor. It also is the ONLY means through which individual productivity can increase-and thus increase productivity across an entire nation.

Electronic/digital currencies actually fulfilling those needs will be the most valuable-there is yet to emerge one that clearly does so.

Ask East Germany and the Soviet Union exactly how well a surveillance society worked out during the 20th century. The 21st is no different in that regard-except that surveillance is cheaper and more intrusive and consequently more deleterious.

In reply to by beemasters

ET (not verified) doctor10 Fri, 09/15/2017 - 07:21 Permalink

stitch-rock   ET Aug 30, 2017 11:48 AM"Physical Gold and Silver will protect you from the abuses of central bankers."Not until the futures complex, used to corrupt the price discovery of PM's, is kaput...

Vote up!11Vote down!0ET   stitch-rock Aug 30, 2017 11:52 AMThe price suppression makes the acquisition of Physical Gold and Silver easier, in time for the reckoning.That is the flipside.

Vote up!2Vote down!-1bjax   ET Aug 30, 2017 12:07 PMI would agree, but I have been waiting since 2009, and I am not getting any younger. Just sold all my big bars this week. I don't need to tell you where it's gone. Of course sold at a loss, especially having paid 20% tax on buying it. Keeping my coins and gold, the rest is in the dreaded BTC :) which has thankfully bought back all my loses in just 7 months. And yes the powe may go off, and yes the world may end, but then again, it may not.

Vote up!2Vote down!-2ET   bjax Aug 30, 2017 12:11 PMWhat if your timing is wrong again?

In reply to by doctor10

ET (not verified) ET (not verified) Fri, 09/15/2017 - 07:26 Permalink

ET Aug 29, 2017 1:58 PMPhysical Gold and Silver will hedge against inflation and shield one's savings from bank failures and crypto theft and sudden devaluation or obsolesence.If you own crypto, you essentially own nothing. Get something for nothing before it's too late. Physical ownership is the endgame.

Vote up!4Vote down!-5tmosley   ET Aug 29, 2017 2:00 PMEmpty words.

Vote up!4Vote down!-3ET   tmosley Aug 29, 2017 2:05 PMBitcoin just fell 21%.Did you know that?

Vote up!0Vote down!0wisebastard   ET Aug 29, 2017 2:07 PMno it didnt....http://finviz.com/forex_charts.ashx?t=BTCUSD&tf=d1

Vote up!1Vote down!-1ET   wisebastard Aug 29, 2017 2:10 PMIf crypto maintains its value, there is absolutely no need to check a site to know how much it is worth.Think about it. How accurate are those price quotes?Are you being played?Prices can be overstated to get more suckers to drop their cash into the scheme.

Vote up!2Vote down!-2

In reply to by ET (not verified)

ET (not verified) ET (not verified) Fri, 09/15/2017 - 07:38 Permalink

ET Aug 29, 2017 1:10 PMPhysical Gold and Silver will never be zero.Cryptos can go to zero because they are non-physical or nothing in a sense. If you own crypto, you want to get something for nothing.

Vote up!2Vote down!-5tmosley   ET Aug 29, 2017 1:10 PMHahahaha

Vote up!0Vote down!0espirit   tmosley Aug 29, 2017 1:12 PMDisasters always happen to somebody else.Bring on the big one.

Vote up!8Vote down!0Bastiat   espirit Aug 29, 2017 1:15 PMThe Fed will do reverse repos to suck up the excess liquidity in Houston. 

Vote up!0Vote down!0DWD-MOVIE   Bastiat Aug 30, 2017 6:56 AMI’m making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do… http://disq.us/url?url=http%3A%2F%2Fwww.jobproplan.com%3A68UoF1LgzM-Yo3S...

Vote up!0Vote down!0ET   ET Aug 29, 2017 1:12 PMHow quickly could crypto go to zero?Anyone work out the math?

In reply to by ET (not verified)

JiminyCrickets Fri, 09/15/2017 - 02:55 Permalink

You shouldn't be allowed to talk about Bitcoin and Ethereum at the same time without mentioning Ethereum was 70% pre-minded and owned by its founders, and that there is no limit to the amount of Ethereum that will be produced.  Both issues that make Ethereum vastlly different from Bitcoin.

Think for yourself TheytookERjobs Fri, 09/15/2017 - 08:08 Permalink

Have you tried iota? It sucks. It's slow, buggy, transactions get lost in the tangle for days, it might be supposedly targetted to the Internet of Things but basically suck at it - the best I've seen is 20 mins for a confirmation. Then it depends on buggy full nodes that arent synched with each other and people don't want to run because they have to give their computing power for free (while paying power and asset depreciation), all of that to support the value of a dubious coin which again the creators assigned themselves a crushing majority of. It might be the next big thing but i dont see that happening without a few major updates. Many other coins would have way better fundamentalsbto go parabolic earlier.

In reply to by TheytookERjobs

devo Fri, 09/15/2017 - 03:05 Permalink

it’s really challenging to decipher the differences between cryptocurrencies like Bitcoin, Ethereum, Ethereum Classic, Litecoin, Ripple, and Dash.

Actually, it's really easy: they're all shit. You're welcome.

Hillarys Server devo Fri, 09/15/2017 - 03:42 Permalink

But sh-t is exactly what I want to invest in.

Normal investments go up 2% or 3% and everyone claps and feels like Warren Buffet.

But poo can go up a hundred times.

Especially if there's a sudden panic rush out of fiat.

If poo will double, triple or quadruple I want some of that stuff. I want to bathe in it.

The difficult thing is to know when to gently step your foot into the pile of poo and when to quickly lift your foot out and change your shoes into a more savory asset.

In reply to by devo

Bentaros Debugas Fri, 09/15/2017 - 03:56 Permalink

There should be a minimum requirement set by ZH in order for someone to comment:- Be over 18, working full time, AND PAYING TAXES. I WAS ENTHUSED BY SOCIALISM WHEN I WAS 16 BUT 8 YEARS LATER I FINISHED COLLEGE AND SAW MY PAYCHECK DECLINE BY 20% BECAUSE MY GOVERNMENT HAS DECIDED TO MAINTAIN SEMI-DEAD OLD PEOPLE AND GIVING THEM EXCESSIVE PENSIONS, ENOUGH.

In reply to by Debugas

Lego Brave Fri, 09/15/2017 - 04:29 Permalink

The next civil war will be beween crypto shills on "which coins are the best" all comments will include "x coin is crap buy v coin. It will explode"Keep fighting over 1's and 0's kids. Sandbox play time it is.The snake that eats its own tail. We can hope, yes?

animalspirit Fri, 09/15/2017 - 04:37 Permalink

Thhe reason for bitcoin's existance (and continued presence) is because of its censorship-resistance. This means that anyone can create a transaction, and nobody (including any corporation or government) can block that transaction from ending up in the Bitcoin ledger of transaction history (i.e., its blockchain database). Censorship-resistance also provides immutability ... meaning it gives protection against any changes being made to the historical ledger data. No company or government, nor even the biggest miner, has the ability to confiscate funds or prevent you from spending funds that you received.

Bitcoin achieves this resistance to censorship thanks to having decentralized communications (P2P nodes) and proof-of-work (mining) transaction validation.

All proof-of-work (PoW) mining has a weakness though ... a miner, pool or cartel with 51% of the hashrate does have the ability to censor transactions (i.e., block specific transaction or block all transactions). With enough hashrate (more than 100% of the existing hashrate), an attack could even include double spending of the attacker's own funds (e.g., to cheat the exchanges by "clawing back" deposit transactions after using those deposted funds to complete a trade).

Bitcoin is protected from this weakness with a massive mining network. To reach 51% of the total combined hashrate, the mining cartel (attacker) would need to acquire nearly one billion dollars worth of specialized ASIC mining hardware.

Ethereum (in its current form) is nearly as well protected, as the cartel/attacker would need control of nearly one billion dolars worth of hashrate (i.e., nearly 3 million higher-end GPUs).

Litecoin, one might assume, would be very vulnerable to this 51% attack weakness -- as there is just a fraction of that (e.g., an amount in just the tens of millions of dollars worth of mining hardware needed). But even Litecoin is well protected because that coin uses a specialized ASIC (as does Bitcoin) and there simply isn't that much hardware available for sale from the mining hardware suppliers.

Ethereum Classic is very vulnerable to the 51% attack (relative to Ethereum's mining strength). In the same manner, Bitcoin Cash is vulnerable relative to Bitcoin's mining strength. But for both, there is not an economic incentive to carry out the attack ... at least not currently.

So it might be dangerous to classify various coins as having the same level of censorship-resistance. More on this described here: https://medium.com/@cointastical/how-ethereum-classic-was-saved-for-now…

If the Dash developer can disable its "Instasend" transactions on that network -- like it just did last month, then so can the government. So even a claim of being decentralized does not necessarily mean it necessarily is. Bitcoin ... is the most censorship-resistant digital currency today.

That is Bitcoin's reason for existence.