Top Market Cap Cryptocurrencies
Cryptocurrency has become a big deal in recent years. There are thousands of new cryptocurrencies; some are successes, some are failures, and some are scams. The sheer number of coins makes it difficult or impossible for a single person to adequately research all of the coins in the space before making investment decisions. With the size of the market, cryptocurrency traders that have demonstrated that they are proficient in identifying which coins will success and which will fail are in high demand.
Despite the volatility of the cryptocurrency market, two cryptocurrencies have held the top positions for a while now. Both coins had the “first mover advantage”, they were the first one to offer their particular services. Here, we’ll talk a little more about Bitcoin and Ethereum.
If Bitcoin was the first cryptocurrency, how can Ethereum be a major “first” as well? It’s just another derivative of Bitcoin that repackages the same ideas and functionality, right? Ethereum is to Bitcoin what a computer is to a calculator. A calculator does a great job at performing simple algebraic operations but isn’t good at much else. A computer, on the other hand, can do everything that a calculator does and a lot of things that it can’t do as well.
Bitcoin is the first cryptocurrency and creates a system for sending and receiving value in a distributed manner using the blockchain. This is great but the potential of the blockchain and cryptocurrency is far more than just performing financial transactions. The creator of Ethereum, Vitalik Buterin, recognized this and developed Ethereum to pioneer the idea of smart contracts. Ethereum is designed to let you do anything on the blockchain that you can do on a normal computer. To make this possible, its developers created the Ethereum Virtual Machine (EVM), which is a fully-functional “computer” that runs on the blockchain. Developers can write programs (called smart contracts) in Solidity (Ethereum’s programming language) and upload the to the blockchain. When an Ethereum user interacts with a smart contract, the commands from the contract are included in a block and run on every computer hosting a node on the Ethereum network. This makes it so every Ethereum node agrees on the current state of the Ethereum “computer” and lets programs run in a decentralized manner (no two blocks should be created by the same person but once a block is created, everyone agrees that the commands included it in have run).
Ethereum’s introduction of smart contracts expanded the possibilities for what can be done on the blockchain. A simple cryptocurrency (handling financial transactions) can be written as a smart contract and a short one at that (less than fifteen lines of Solidity). The expanded potential of smart contracts has led to the development of Ethereum tokens, smart contracts that are new cryptocurrencies designed to provide different types of functionality to the blockchain. These cryptocurrencies can run solely on the Ethereum blockchain or use tokens to link their own blockchain back to the Ethereum blockchain. The number of Ethereum tokens has exploded, with over 77,000 in existence by the two year anniversary of the first launch of the Ethereum platform.
Ethereum is not the only smart contract platform, with others making their own versions just like different cryptocurrencies have built off of Bitcoin. However, Ethereum is currently the most successful smart contract platform and the second most successful cryptocurrency after Bitcoin. For more information on Ethereum, check out our Ethereum guide.