The year 2017 was big for digital currencies...
It was the year that blockchain technology hit the mainstream. People are now dropping terms like blockchain and Bitcoin (BTC) in casual conversations.
And trust us, this is a very different story from what was happening a year ago. At Wealth Daily, we’ve been following digital currencies since 2014 — when Bitcoin was still regarded as "fake money for nerds."
Now, thousands and thousands of people are interested in learning about Bitcoin. And they've started looking past the world’s first digital token toward other digital currencies.
As we head into 2018, Wealth Daily's team has isolated a few more digital currencies that investors should be keeping an eye on.
Each of the digital currencies in this list is unique. One was intended to act as a currency, another as the foundation of a powerful network, and the third as anonymous cash. Over the course of this report, we focus on why each of these technologies is unique and promising.
Let’s start with our first currency focus: Litecoin, otherwise known as the silver to Bitcoin’s gold...
If you like Bitcoin, you’ll probably like Litecoin.
Often referred to as the silver to Bitcoin’s gold, Litecoin is the product of one of the earliest Bitcoin forks.
By this, we mean that Litecoin was created from the Bitcoin protocol. It's similar to Bitcoin but has a few improvements.
Litecoin was founded by ex-Google Engineer Charlie Lee in 2011. Since then, the token has increased in value by over 10,000%.
There are a few technology-related reasons for why Litecoin stands out from the crowd.
First, for those who are enthusiastic about decentralized money, Litecoin is actually far more effective at being that than Bitcoin.
Litecoin can confirm a block (which catalogs transactions) in two minutes. But it takes Bitcoin 10 minutes to accomplish this feat.
Outside confirming transactions faster, Litecoin also isn’t subjected to all the drama that tends to affect Bitcoin.
You may recall that Bitcoin went through some major changes this year. The code behind the digital token was forked, creating a new token known as Bitcoin Cash (BCH). Bitcoin Cash is the result of a long civil war in the Bitcoin community — with multiple parties arguing over Bitcoin’s long-term structure.
Litecoin doesn’t suffer as much from this problem.
Its community adopts modifications to the token far faster than Bitcoin's warring and tumultuous community does.
That's why Litecoin was able to adopt SegWit — a major scaling solution. It's also why the token may be the first token to implement something called the Lightning Network.
Litecoin also has room to grow...
At the time of writing this report, Litecoin holds just over 2% of the total market cap. And Bitcoin holds over 50%.
For now, one of the simplest ways to buy Litecoin is through Coinbase.
If you're interested in learning about how to set up a Coinbase account or trade digital currencies, you may click here...
Ethereum is staying in the running for one of the top digital currencies of 2018.
Ethereum became popular in 2017, rocketing in value alongside many of its peers. Ethereum is a fairly incredible technology, with the ability to improve hundreds of industries and streamline the ways in which we manage information. Ether is the actual name of the currency, and Ethereum is the name of the network.
But before we get into all that, let's start at the beginning...
First off, for those of you who don’t know a lot about digital currencies, know that Ethereum is different from Bitcoin or Litecoin.
Ethereum was developed by web developer Vitalik Buterin. After years of developing with the Bitcoin blockchain, Buterin was frustrated with the limitations of the older technology.
What came from his frustration was the development of the Ethereum network — a powerful blockchain network intended to not only rival Bitcoin but also surpass it.
Ethereum acts as a platform for developers to build something called decentralized applications (dapps).
The Ethereum network also has the ability to execute something known as smart contracts.
Smart contracts are incredibly valuable — having the ability to remove the middleman in multiple industries, including finance, medicine, and even insurance.
So, how does a smart contract work? It’s actually pretty simple...
Basically, a smart contract sets parameters in the code that guarantees one result doesn’t happen unless another event happens.
Say I have a smart contract set up to help me in paying my rent. This contract dictates that money will only leave my account on the first of the month. When the first of the month rolls around, the money will automatically leave my account without any interaction between my landlord and me.
Ethereum’s groundbreaking tech has earned it the support of multiple mega-corporations, including Microsoft, JPMorgan, and Intel. And outside those juggernauts, Ethereum is also backed by the Enterprise Ethereum Alliance (EEA).
But we knew all of these things in 2017. So, why will 2018 be bigger?
Ethereum could be just hitting its stride...
The team behind it is making some major changes that could speed up the Ethereum network.
One of these updates is something called the Raiden Network, which would allow the Ethereum network to process multiple smaller transactions outside its blockchain.
Another update is the proof of stake (or PoS), which will change the mining process behind Ethereum in order to make it less energy intensive.
These are big events that we don’t have time to explore fully in this report. But you can learn more about Ethereum through our digital currency training service.
For those interested in buying it, Ethereum can be purchased on Coinbase, Gemini, and a wide range of other exchanges...
Of the three anonymous digital currencies on the market, Zcash is certainly worth noting.
Many new digital currency investors come into the space thinking that Bitcoin is anonymous, but this is a Bitcoin myth.
Bitcoin is actually quite transparent. Why? Well, transparency is one of the core benefits of the blockchain. All Bitcoin transactions are recorded in a public ledger, and your electronic signature is affixed to each transaction.
Now, that electronic signature might not tell people who you are, but it could. Imagine it like a fake writing name. If someone figures out that you're behind a fake name used to write one novel, they'll be able to connect all novels written under that name to you.
Of course, the kind of transparency that comes with a public blockchain like Bitcoin's isn’t always bad.
But even though a very limited number of individuals and companies need to be anonymous, some do.
And it's for those companies that anonymous digital currencies are useful.
And there are three on the market: Monero, Dash, and Zcash.
Both Monero and Dash are powerful technologies. We cover them in detail in our digital currency education service.
However, there are some concerns with those tokens — specifically Dash, including concerns about how the token was released.
So, for this feature, we decided to focus on Zcash.
The token was founded by Zooko Wilcox who has over 20 years of computer science experience. Zcash has a supply of 21 million coins and relies on the same mining algorithm as Bitcoin. This mining algorithm is called proof of work (PoW).
Zcash uses a cryptographic technique called zero-knowledge proofs (zk-SNARKs).
Zk-SNARKs make it so transaction information is encrypted and safe from double spends.
Double spends — a network attack where the same token is spent more than once — is a fairly large issue with digital currencies. The transparency of Bitcoin’s blockchain makes it harder for them to happen. That being said, with anonymous digital currencies, other measures had to be taken.
The only information available on the Zcash blockchain is the time that the transaction took place.
By allowing users to be anonymous, Zcash gives them a higher change of fungibility.
There are some concerns about Zcash — specifically the hype drummed up around its release, which rapidly inflated its price. After a sell-off, Zcash’s price settled and has risen over 100% this year.
If you're interested in buying Zcash, you can find it on Bittrex, Kraken, and Poloniex...
Moving Into 2018
We're heading into exciting times for the blockchain and digital currency space.
Investors are flooding to exchanges, and top exchanges are adding more users than any year prior. Other big events are marking other crucial growth steps. Those events include the introduction of Bitcoin Futures (which just came onto the market) and the development of Bitcoin ETFs (which should be on their way).
In some form or another, digital currencies are here to stay. They've violently shaken our traditional investing structure and opened the doors to many promising technologies.
That being said, you shouldn't approach this space blindly.
All the investments listed above are high risk and speculative. Bitcoin is famous for dragging investors through stomach-churning surges and dips. Investing can have very high rewards, but every digital currency investment should be approached with caution and education.
So, if you're looking for further education, make sure to check out Token Authority, our FREE digital currency education service.
With this service, you'll receive a monthly newsletter that keeps you abreast of major changes in the space and also educational reports and videos.
We wish you the best of luck with your investments!