The Holy Trinity of Cryptos

You could be forgiven for being overwhelmed with the ridiculously large number of Crypto-currencies flooding the market these days. This is largely because there is very little cost, other than some effort, to create a clone of an existing coin, tweak some parameters, start mining, and there you have it, your very own unique digital coin.

In truth, the clear majority of the many crypto-currencies out there are simply ‘get rich quick’ schemes deployed by their creators. Some are more well hyped than others, and some are simply better at public relations, and manage to gain strong traction with media publications.

Today, there are three cryptos which stand as clear leaders in their respective categories. The categories we look at are;

• 1- Store of Value
• 2- Dapps
• 3- Privacy

Bitcoin – Best crypto for ‘store of value’

Not only is Bitcoin the ‘first-mover’, and therefore the ‘big daddy’ of all cryptos (many of which are simple clone copies), but Bitcoin currently holds the largest hashrate by far, just under 4.3 billion ghz at the time of writing. This makes Bitcoin the most secure, un-hackable, decentralized crypto on the market.

Many online exchanges will choose to pair alt-coins against Bitcoin only, and rarely do they list pairs for any of the others. This is also a side-effect of the first mover advantage. However, Bitcoin’s network effect is slowly dying, and recently dipped below 50% in market-cap against the altcoins for the first time ever, but its price just keeps going up…

Pros

• – First mover advantage
• – Most secure blockchain with the highest hashrate
• – Almost a decade worth of evidence that it works

Cons

• – 3 transactions per second limit due to 1MB blocksize
• – Increasing fees for transactions due to 1MB blocksize
• – Transaction delays due to 1MB blocksize

Ethereum – Best crypto for Dapps

Dapps is short for ‘decentralised applications’. Ethereum is a natural evolution of the blockchain, which takes it to the next level. Not only crypto-currency need be on a decentralized blockchain, but also applications, contracts, autonomous organisations, and much more.

Ethereum’s ability to create applications which aren’t even thought of yet gives it unlimited scope in its prowess. However, learning solidity (Ethereums dapps’ language), can prove to be very challenging, and there are many pitfalls for which to watch out.

With the release of the upcoming ‘metropolis’, which should make it easier to use, Ethereum’s price and utility may very well soar over the next few years.

Pros

• – 2nd largest hashrate in the market
• – Excellent development team with clear leadership
• – Immutable Decentralized Autonomous applications
• – Backed by large organisations including Microsoft

Cons

• – Solidity can be hard to learn, and difficult to review (as the case with “The DAO”)
• – Can be technically too complex for the non-IT savvy

Privacy – Monero (XMR)

Monero may very well be the crypto that Satoshi wished he invented. Like a distant cousin to Bitcoin, Monero is built on the same fundamental idea but with striking differences in protocol and execution. These differences include its dynamic blocksize – it doesn’t have the issue of a hardcoded limit – so it can grow without crippling the network, nor adding any fees to the system that Bitcoin now experiences. It also future proofs this concept because miner rewards on the network will never run out. Following the initial reward curve, Monero supply will continue with a sub 1% inflation ensuring the currency keeps providing.

Most importantly, Monero transactions are highly private. Transactions on the blockchain can only be viewed with a ‘viewkey’. All important details, such as sender, recipient, amount, are all encrypted and therefore hidden.

It is no wonder the FBI expressed concerns by actually naming Monero as currency of concern regarding traceability.

Software developers have long known that there is always a trade-off between usability/functionality, and security. If you wish to remain truly private, Monero may not be your simplest transaction, but it sure will be the most private, and most fungible. Crypto DASH (a bitcoin clone) may need a mention in this section (as its ease of use is superior to Monero), when it comes strictly to privacy features, Monero utilising ring signatures wins hands down against all.

Pros

• – Dynamic Blocksize allows scalability
• – Is private by default (not an opt-in process)
• – Fungible (your Monero won’t be tainted by past transactions)
• – Decentralized Mining (does not rely on GPUs)

Cons

• – GUI still needs some work
• – Ease of use (although using the web-wallet does alleviate a lot of this)

Eli Afram M.IT
Developer/Analyst
@justicemate