• Henry Benjamin , Marketing Coordinator at Skycoin


• 16.02.2018 10:30 am
cryptocurrency , bitcoin

The world was introduced to cryptocurrencies with Bitcoin, and at present, it is still the de facto cryptocurrency on the market.

The thing is, the future of cryptocurrency doesn't lie with BTC. The majority of things that are first to market always get improved on and leapfrogged by an alternative.

On the downside for BTC is there are hundreds of altcoins that hope to take the number one spot.

Some of these only want to steal BTC's thunder and become number one from an investment point of view while other altcoins aim to address the flaws that are with BTC.

Major Bitcoin Problems

BTC has flaws and plenty of them. Most are of its own making while there are some problems which could affect it is certain companies so wished. What is the most significant issue that springs to mind?

Bitcoin mining is one of the most significant challenges it faces for a few of reasons.

First up is energy costs. Transactions consume massive amounts of energy to perform. This problem will only get worse as time goes by as the miners once they see there is no cost benefit will jump ship and look at mining another coin.

Second is Bitcoin scalability problem which comes from both the slow transaction speed and also the more users that use BTC, the slower the network and the Blockchain becomes.

Secondary Bitcoin Problems

Following on from these bitcoin problems are others which are not directly the fault of the cryptocurrency.

Everything was supposed to be decentralized. However, the entire mining operation is controlled by around three significant mining pools.

It doesn't take long for these mining pools to consider manipulating the BTC transactions and then the value of the coin for their own benefits passed the simple mining.

Problems Outside of Bitcoin

We see a bitcoin transaction can be expensive and also take a considerable amount of time. 

This is another area where Satoshi had had the vision of something being very different. Aside from this is Net Neutrality and the effect this could have on BTC.

Now large ISP's can restrict bandwidth for the Blockchain or impose higher rates. These, of course, will ultimately end up at the hands of end users.

BTC could also be banned from one of these major networks if they took a liking to another altcoin and decided to favor that. If this happened exchanges would suffer so the rise of BTC could be halted and could start the decline of the coins favoritism among investors.

What is the future?

Second generation cryptocurrencies have much the same problem areas when it comes to net neutrality and problems with the Blockchains scalability.

Although there are over 1,500 altcoins. Many of these can be wiped out from the equation as they have these flaws or they have nothing to offer. They have jumped on the BTC bandwagon and will find they are out of luck.

A New Generation of Cryptocurrency

Some coins have looked at the flaws on the problems with the internet and have set things in motion to change all of these.

Stellar

This coin was created from a fork in Ripple. Where that focused on banks Stellar has focused on individual users.

The tokens are called Lumens and are worth a small amount. Transaction speed takes as little as 6 seconds, and these transactions are passed through a decentralized exchange where the best rates of exchange are found for any cross currency transaction.

Transaction times are fast, secure and safe and a little later in the year, a clearinghouse is considering using this coin for its payments rather than continuing with BTC.

Skycoin

The pack of the bunch is this coin, and radical approach to the "New Internet" Skycoin has no mining so transaction times are instantaneous and there are no fees.

Payments are made for bandwidth usage on the wireless mesh-network that Skywire brings.

Now we could have a network that has no big-brother tracking our every move while being highly secure and much faster than what we currently have.

Scalability has been addressed as the more extensive the network, the quicker and more resilient it becomes.

If you are looking at which cryptocurrency to invest in you might find it worth taking a closer look at what SKY offers and how many flaws with BTC and the internet they have resolved.

NEO

This coin has chosen to be built on the top of the Ethereum Blockchain compared to the one BTC uses, so some flaws are eliminated right off the bat.

Often called the Ethereum of China it has the backing of a country should the country start supporting cryptocurrencies as a payment form.

NEO also brings smart contracts rather than only being a payment system so it has much more to offer as many assets can be held inside the Blockchain.

The one downside is it still runs on current internet infrastructure so if ISP's wish to hinder its growth, this could affect it in the future.