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Why 2017 is the year of cryptocurrencies

We’re not kidding when we say that 2017 is the year of the cryptocurrency. There’s been a significant shift towards trading in cryptocurrencies, particularly with Bitcoins. In 2017, the value of a Bitcoin exceeded the price of an ounce of gold for the first time when it traded for US$1,402 (£1,046) on 1st May. Just 10 days later, the price of one BTC moved up to US$1,800 (£1,345), then 9 days later it hit the US$2,000 mark (£1,490). But it didn’t stop there.

    Pixabay

During August, Bitcoins made another leap in value. On 5th August, the value increased again to hit the $3,000 mark (£2,239). A week later on 12th August, the price reached US$4,000 (£2,985), and then two days later it hit an all-time high of US$4,400, that’s £3,285 for one Bitcoin.

Beyond that news, other types of cryptocurrencies have begun to find their place in this increasingly valuable marketplace, meaning that currencies like Ethereum and Zcash should also be on your radar if you’re thinking of becoming involved with cryptocurrency-trading. All of these momentous changes in the market mean that the combined value of all cryptocoins now exceeds £74billion.

What’s the future look like?

Talk of squabbling Bitcoin execs and a lack of progress with the currency mean that trading in it is not as attractive as it was during the first half of 2017. Rising transaction fees are also making it less attractive to investors and for those looking to use it as a payment system, however, there are some strong competitors who are worth investing it.

Ethereum

Ethereum is perhaps the strongest right now but it’s a completely different animal to Bitcoins. It can do loads of thing that Bitcoin can do but its scripting language is more advanced so complex applications with wide-ranging uses are in play for investors.

Ethereum differs from Bitcoin in 4 main ways. 1) Ethereum allows for faster transactions as the block time is 14 to 15 seconds whereas Bitcoin’s is 10 minutes. 2) While Bitcoin’s block rewards halve every 4 years, Ether release the same amount each year forever. 3) Transaction costs are determined by computational complexity, bandwidth use and storage. Bitcoin transactions compete equally. 4) Ethereum’s own Turing complete internal code means it has enough power to calculate anything, whereas Bitcoin is not as flexible.

Zcash

Zcash is another alternative to Bitcoin that you need to look into. Zcash is one of the best cryptocurrencies to trade in if you want full anonymity. For sure, Bitcoin’s system allows for some anonymity but its blockchain is pretty transparent as each transaction is logged and made available to the public. With Zcash you can make anonymous transactions thanks to technical wizardry that we’re not going to go into here.

The other thing of note with Zcash is that the organisation is set up as a business, not as a community. That means that they reward investors through a tax on mining rewards called “Founders rewards”. That’s not great news for those of you looking to mine Zcash as the company gets a cut of every unit of Z currency you mine during the first 4%.

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