Looking beyond bitcoin to the cryptocurrencies of 2018

World
Europe

While concerns over a bitcoin bubble have inflated alongside its escalating prices, investors looking for the next big cryptocurrency have a wide range of alternatives going into 2018. The twists and turns of this year are set to continue – so what should we look out for over the next 12 months?

OneCoin on the rise in China

While 2017 saw bitcoin’s rise in China abruptly halted with a ban on initial coin offerings (ICOs) and the closure of cryptocurrency exchanges, investors have still found new ways of speculating on blockchain technology.

Xunlei’s OneCoin, which is not related to a Ponzi scheme of the same name, was initially created to buy services like faster download speeds or extra cloud storage on the company’s shared blockchain network. While Xunlei insists that OneCoin was not designed with speculation in mind, its price has risen more than 80 times since launching two months ago.

The growth in speculation has brought OneCoin under greater scrutiny, forcing Xunlei to rename it as “Lianke,” as well as demanding all users register their real names.

/VCG Photo

In 2018, OneCoin could be forced to come to a stop or radically transform, in order to prevent escalating speculation. Whatever its fate, its popularity in the last few months of 2017 shows that Chinese investors have not lost their hunger for cryptocurrencies – an appetite that will likely seek new avenues next year.

Will 2018 be the year of Litecoin?

While bitcoin has dominated headlines, other cryptocurrencies have also enjoyed incredible increases in the past year. If you bought one Litecoin a year ago, your investment of 4.33 US dollars would give you 245 US dollars today – a return of some 5,660 percent. In comparison, bitcoin over the same period has given returns of around 1,600 percent.

The bitcoin frenzy has not only pushed up prices, but also drastically slowed down how long it takes to make a transaction, as well as raised the fees to make a bitcoin trade.

Litecoin, on the other hand, is cheaper and a lot faster, while its use of “scrypt” encryption makes it arguably more secure.

/VCG Photo

These advantages have seen Litecoin described as the silver to bitcoin’s gold, and while a bitcoin slump would likely mean a wider hit to cryptocurrencies in general, Litecoin is in a strong position to continue riding in bitcoin’s wake as an alternative.

The next generation of cryptocurrencies

Bitcoin’s first trade was in 2009, and since then little has changed in the technology backing the cryptocurrency. However, tech has evolved rapidly since then, and 2018 could be the year when alternative cutting-edge cryptocurrencies are adopted on a wider scale.

There is a huge range of alternative cryptocurrencies currently available, some of which could transform the sector and work alongside new concepts like artificial intelligence, fintech and the Internet of Things (IoT).

Ripple could make waves in finance

Ripple has been successfully pursuing major finance companies, offering its technology as a solution to transaction and currency costs between global financial institutions, cutting out third parties.

Transactions take just under four seconds, and fees are a tiny fraction of the cost of bitcoin trades. For cross-border deals between financial institutions, Ripple claims that using its network can mean savings of around 33 percent.

/VCG Photo

Unlike bitcoin and other cryptocurrencies, Ripple is centrally controlled, and all coins have already been mined. The potential is there for Ripple to put an end to slow SWIFT international payments, and for it to even become a global currency in its own right.

2017 saw it offer year-to-date returns of more than 3,000 percent, and the backing of big names in finance as well as its low price of 0.26 US dollars means more investors could take a punt on it in 2018.

IOTA to take the world beyond blockchain

Unlike other cryptocurrencies, IOTA does away with transaction fees, mining and blockchain altogether. The concept is based on IoT technology, and aims to enable machine-to-machine payments and a seamless network for big data, smart objects and the sharing economy.

Ripple and IOTA have both done away with the concept of mining coins. /VCG Photo

IOTA uses directed acyclic graph technology called the Tangle instead of blockchain – while complicated, this means transactions are almost instant, and the entire network can easily scale up and expand without experiencing any slowdown. In theory, an increase in users and transactions means the Tangle actually grows even faster and more efficient.

IOTA and the Tangle are already being used as a data marketplace, with companies like Microsoft, Huawei and Airbus conducting micro-transactions to purchase data from wearable tech, IoT devices and each other. Perhaps more excitingly, individuals will be able to use the Tangle in future to sell their own data.

The huge potential of IOTA is already being recognized by investors, who have made it the fourth biggest cryptocurrency with a market cap of more than 11.7 billion US dollars. As IoT tech develops in 2018, expect IOTA to be going forward in tandem.