Thursday, December 5, 2013

Why StableCoin is a Better and Cheaper Option Than Bitcoin, Litecoin, and Quarkcoin

In recent days, the internet and media have been abuzz about Bitcoin, the cryptocurrency which has made millionaires of thousands of people of all ages, and allowed an internet black market to flourish like nothing else seen in this world. There have also been many recent publicity stunts involving bitcoin as well. 
Although Bitcoin is becoming widely accepted, there has been much confusion about it. Firstly, what is Bitcoin?

Bitcoin is a cryptocurrency, and throughout the media frenzy, many people have come to believe that all cryptocurrencies are bitcoin. This is simply not true, there are many different cryptocurrencies, with different features and specifications.

The second general confusion is how does any of this virtual currency have value? Surprisingly, the value of cryptocurrencies similarly comes from the way gold and silver have value. Because gold and silver always require large labor costs to mine for every ounce, their prices will generally at least remain at the mining price, value from other uses put aside.

The only way to acquire cryptocurrencies other than buying them, is to mine them as well. How is it done? A computer hashes away at a set of equations that need to be solved on a collectively downloaded "blockchain". Each block contains several Bitcoins (or other type of coin). If all the equations in a block are solved, the coins in that block go to the computer that mined it.

However, the equations become more and more difficult as more blocks of coins are mined. Thus, greater and greater computing power is required. It would now cost a normal computer upwards of hundreds of dollars to mine even a single bitcoin, and for this reason, companies such as Butterfly Labs make specially produced Bitcoin mining computers for upwards of 22,000 dollars. Similar efforts are being done for other types of cryptocoins.

Now that the basics of what a cryptocurrency is - and why they have value, are out of the way, let's discuss why the most popular ones: Bitcoin and Litecoin, are not the best choices.

Bitcoin and Litecoin are both proof-of-concept coins. Bitcoin came about to prove that cryptocurrency can exist, it is workable, it can be anonymous if you put effort into it, it can be accessed from any place that has internet, it is secure, and that it can be used as a currency. It has successfully proved these things, but there are certainly problems.

For one, it is slow. Bitcoin has a 10 minute minimum transaction time. Secondly, it is now facing potential heavy regulation by the U.S. government, and companies such as CoinValidation are working on methods to trach every Bitcoin address that they can possibly attach an identity to - not a good sign for a currency where people like anonymity in transactions. A third problem is that it is proving to be extremely volatile. This is not good for business, and thus makes bitcoin out to be more like a commodity than a currency.

Now on to Litecoin. Litecoin is a coin that came about due to immense centralization of mining power in the bitcoin market, thus cornering people with regular computers out of the market. It developed a different algorithm to mine them, which required memory and a different type of processing. This made all the bitcoin super-miner computers obsolete for this task. This new mining technique has now been proven because Litecoin is very successful and still around, however, this coin was also just a proof of concept. Litecoin is relatively slow, with a transaction time of 2.5 minutes, and is just as volatile as Bitcoin, as it tends to fluctuate almost equally with Bitcoin's price.

Before I go over Stablecoin, I'd like to cover Quarkcoin.

Quarkcoin is a coin that claims to be more secure than Bitcoin, but Bitcoin is already extremely secure, so Quarkcoin is pragmatically nothing new. Its current price is being driven up by hype that it will be mentioned by Max Keiser soon. The coin, however, has a massive percentage of its potential coins owned by its developers, allowing for dangerous falls in price if they decide to cash out.

Ultimately, the only reason all of these coins have so much acceptance right now is due to exchanges that support them, and name recognition.

However, this will soon change. What most media does not mention is that the cryptocurrency community that spawned Bitcoin is currently alight with buzz about what will be the next big, and most viable currency.

Which is exactly why I would like to introduce StableCoin. StableCoin is a recently introduced cryptocurrency which, as the name implies, has a focus on stability. Its features include everything that one would expect to see in the long term success of an online currency.

It has a fast transaction time of 40 seconds, which allows for just enough time for regular transactions, but is also just slow enough to ensure no transaction errors occur. Its difficulty to mine is also recalculated extremely quickly, at a rate of once every 90 blocks. This ensures that the supply of StableCoin remains very stable, and also that there will be no errors in the StableCoin transaction list. This will also ensure that the currency will always function. Unfortunately, many other cryptocurrencies have had such aforementioned errors, bringing about losses of confidence.

Another particularly unique feature StableCoin has is that it will feature something called mixed transactions. A mixed transaction essentially scrambles a transaction, and then rebroadcasting it from a geographically separate location from yours. This makes it totally impossible to track the transaction, see who it is coming from, or where it is going to. This circumvents tracking efforts from companies such as CoinValidation.

One final thing to mention about StableCoin that you may encounter, is that the coin was partially mined by the developers before being made available to the public. The purpose of this was to provide another method of anonymity by using these coins to exchange between transactions, but this was an unpopular move, so the team effectively destroyed these coins by provably removing them from circulation permanently.

Overall, for anyone who is just getting into cryptocurrencies, I'd say StableCoin is a great buy. It can be bought easily on an exchange such as Crypsty, its stability ensures safety for business, its anonymity ensures large amounts of adoption, and its speed ensures viability for day-to-day transactions. With the currency being so new, the price is still extremely low for what this coin is worth. As far as cryptocurrencies go, this one can't be beat.

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