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Alternative Cryptocurrencies Thrive in Bitcoin's Shadow
Numerous altcoins are riding on bitcoin's coattails: some designed to improve upon bitcoin and others designed for specific purposes.
By Carrie Kirby
Updated Sep 10, 2021, 12:05 p.m. Published Dec 24, 2013, 3:30 p.m.
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David Sterry has been a bitcoin believer for years. He even founded a bitcoin startup. But when he heard that miner demand was causing monthlong backlogs on certain computer components, he realized it was a big, big moment – not for bitcoin, but for litecoin.
The alternative cryptocurrency, created in October 2011 with a few tweaks to the Bitcoin protocol, has seen its value rise and fall in lockstep with bitcoin's. As bitcoin has risen in prominence and in price and become more difficult to mine, new miners have rushed into litecoin as the next best thing – and purchased just about every available AMD Radeon graphics card, the most efficient way to mine litecoin.
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“It’s kind of capped by how fast AMD can create video cards,” said Sterry, founder of the nonprofit Litecoin Association. The rush on AMD's product has been so pronounced, Sterry said, that "Litecoin could be the first math-based currency to have an impact on a Fortune 500 company's bottom line."
Litecoin now has a market cap of $410.8m, making it the second biggest cryptocurrency after bitcoin's $7.7bn – but far from the only alternative math-based currency out there. Cryptocurrency watchers estimate there are as many as hundreds of others.
"You can take Bitcoin open source code and make a couple tweaks, and you have an altcoin," said Greg Schvey, head of research for The Genesis Block, a New York research firm specializing in bitcoin. "I could make a new alternative currency by the end of this conversation."
Primecoin
Market cap as of 22nd December: $7.5m
Date started: July 2013
Description: Searches for new large prime numbers as proof of work
Market cap as of 22nd December: $7m
Date started: April 2013
Description: Uses a scrypt-based hashing algorithm, with advanced checkpointing to guard against 51% attacks
Coin stack image via Shutterstock
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