Dave Bowers forwarded this article from the September 1, 2018 issue of The Economist about the many new cryptocurrencies springing up in Bitcoin's wake. The article
appeared in the Technology Quarterly section of the print edition under the headline "Chips off the block". Thanks. -Editor
BITCOIN FANS like to point out that, like gold, the cryptocurrency is in limited supply. Its protocol specifies that only 21m bitcoin will ever be mined, with the last
batch due in the middle of the 22nd century. A fixed supply, say bitcoiners, ensures that, unlike ordinary currencies, it will not be eroded by inflation.
But whereas the supply of bitcoin may be limited, that of cryptocurrencies is not. Bitcoin’s protocol is open-source, so there is nothing to stop others copying the idea. And
they have done, with gusto. So far thousands of different cryptocurrencies have been launched. Like bitcoin, they have proved attractive to speculators. For example, XRP, issued
by Ripple, a payments firm, rose from less than one cent to touch $3.46 in January this year (it has since dropped back to around $0.35). The magnitudes vary, but the price
movements of cryptocurrencies tend to be correlated. When bitcoin is rising, the so-called “altcoins” tend to rise as well, and vice versa.
Zcash, Dash and Monero are all cryptocurrencies that aim to give users more privacy. Monero, in particular, quickly became a popular alternative to bitcoin in some of the less
salubrious corners of the internet. “Stablecoins” such as Basis, Carbon and Tether, meanwhile, attempt to tame the volatility that makes cryptocurrencies attractive to
speculators.
Many cryptocurrencies, though, go nowhere. Deadcoins.com, a site that keeps track of moribund ones, lists about 900 coins that have been abandoned by their creators or their
users.
To read the complete article, see:
From one cryptocurrency to thousands
(https://www.economist.com/technology-quarterly/2018/09/01/from-one-cryptocurrency-to-thousands)
Wayne Homren, Editor
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