You have no doubt heard of Bitcoin by now. It is a cryptocurrency that may someday challenge the dollar as the world’s preferred international currency. Some experts expect the Euro to challenge the dollar long before anything else does.

Bitcoin is not the only cryptocurrency and it had a rough 2017 losing value and market share. Ripple and Euthereum are challenging Bitcoin, but before the what in this story, let’s consider the how.


Imagine a huge, digital ledger free of government controls. That’s blockchain technology, i.e., the engine driving cryptocurrency.

Blockchain allows a consumer and business in a relationship, to manage commerce without a bank or any other middleman. It offers a decentralized database of transactions that everyone on the network can see, according to Rosamund Hutt, a writer at the World Economic Forum.

This network is essentially a chain of computers that must all approve an exchange before it can be verified and recorded. In some cases, this takes just over three seconds.

Security Issue

While it sounds wonderful, the technology is in its infancy and is experiencing growing pains. For instance, A South Korean company, Youbit, had to file for bankruptcy last year after hackers robbed it twice, grabbing tens of millions of dollars’ worth of coins.

South Korea believes a North Korean cybercrime group known as Lazarus is behind the attack. Bluenoroff and Andariel are other hackers linked to North Korea.

How it works

So, how can you use this new technology? You’ll need a cryptocurrency wallet to set up an account. There are four types:

  1. Hardware wallets that connect to your computer via USB.
  2. Mobile wallets allow you to store your information on your mobile device.
  3. Web wallets are cloud-based services that store your data on their servers.
  4. Desktop wallets for your personal computer.

Think security when deciding on a wallet.

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If it is easy for someone to hack, you don’t want it. Create backups of your wallet and encrypt them.

Next, you want to find an exchange. There are hundreds of them. Andreas Rivera of Business News Daily says sites like Coinbase and GDax have real-time exchange rates. Then you simply buy a coin, or part of a coin, and go to it.


Depending upon timing, 2017 was rough for Bitcoin investors. Stock prices roller-coasted from $1,000 per coin to $19,000, and then closed at $13,131. Some financial experts wonder why investors would speculate on a currency that has no intrinsic value. The US national debt is $20.6 trillion and growing, according to the U.S. National Debt Clock. Other countries own $6.4 trillion of that debt and other trillions are issued in T-notes and bonds. Obviously, someone is willing to throw good money after bad. Then there is always the futures market, real estate investments and buying stock low to sell high.

While investors like Warren Buffet and his disciples claim cryptocurrency is fool’s gold, the market is valued at $661 billion.

The market is not worth that much, but will it be? With a limited number of coins mined, miners update the blockchain, which number will not increase without the consensus of all cryptocurrency providers, save one with its own system. Technology will improve to allow more bytes of data on each MB of space and to speed the transaction fee.

Bitcoin once dominated the market with more than 90 percent market share. It is now less than half of that at 35.7 percent market share as of January 1. According to Coin Market Cap. Ripple, the exception mentioned above, captures 14 percent of the market. Ethereum collects 13 percent. 18 percent of the market is held by companies that individually own less than one percent of market share.

Bitcoin’s transactions take, on average, 66 minutes and cost $14.63. That is not very competitive compared to Ethereum’s 14.2 seconds and 33 cents or Ripple’s 3.4 seconds and less than a penny per transaction.

Ripple is centralized, it does not have mining or miner's fees. It is a closed blockchain, and it requires the destruction of XRP in order to perform transactions. Many believe cryptocurrency requires a standard number of XRP, the Ripple systems currency. Ripple Labs holds the number of ripples, XRP, to $100 billion. Theoretically, the company can change the number of ripples when it sees fit, thus risking inflation.

Russia and Venezuela are exploring cryptocurrencies. Moscow thinks a “cryptoruble” would be the way to sidestep Western sanctions. Caracas vows to have the Petro, a cryptocurrency backed by diamonds, gold, and oil reserves, ready soon. A registry for the Petro is open until January 21.