The value of all digital currencies surpassed $30 billion for the first time ever as interest and adoption continues to increase due to numerous factors, including the application of blockchain technology to increase efficiency while reducing costs.
Starting with bitcoin, despite undergoing numerous problems, including a freeze in fiat deposits and withdrawals at Bitfinex, one of bitcoin’s biggest exchange, the currency has nonetheless increased in value from around $880 to $1,250.
The currency is undergoing some difficult times with a long lasting scalability debate seemingly taking its toll, but as far as price is concerned, it has not only maintained its value, but increased.
The main reason is probably due to greater awareness of the currency which has now gone mainstream in America with most ordinary citizens having at least heard its name. Giving it a lion share of the market cap, currently standing at $20 billion.
However, relative to other digital currencies, its market share has fallen, now standing at around 65%, down from 95% just months ago. The main reason is probably because of the rise of ethereum, a digital currency similar to bitcoin but with added functionalities which allow eth coins to be programmable money through smart contracts.
Ethereum has risen from $5 in December 2016 to now stand at around $50, with its market cap the second largest at $4.5 billion. The highest ever achieved by any digital currency except for bitcoin.
It took 4-5 years for bitcoin to reach that market cap. For eth it took just one year because the currency has attracted the attention of many bitcoiners due to its plans for unlimited scalability as well as because of its unique smart contracts functionalities.
An older currency, litecoin, has also been moving. The bitcoin copycat has reached an agreement to implement segregated witnesses (segwit). A protocol upgrade which allows for second layers like the Lightning Network that can significantly increase capacity.
No one really uses litecoin, with the currency barely having 4,000 transactions a day, while eth enjoys some 80,000 and bitcoin handles around 250,000. But the protocol upgrade has brought some attention to the almost forgotten currency, mainly due to its proxy politics regarding bitcoin’s never ending scalability debate.
Litecoin has increased in price from around $4 to a high of $16 in just weeks, now trading at just under $15. It’s not clear whether it has any further fuel left as the segwit upgrade is very much a predictable probably non-event.
Afterwards, we are to wait for the Lightning Network (LN) on litecoin, but since the currency has plenty of on-chain capacity and as good as no use, it’s not clear at this stage whether LN on litecoin will just be ignored or otherwise.
What is clear, however, is that overall interest is increasing. The digital currencies space has gone up 3x since 2013, from around $10 billion to $30 billion. That gives it a substantial economy and a valuation higher than twitter or snapchat, with its user numbers estimated at around 10 million, more than many countries.
Vibrancy and innovation is mostly concentrated in ethereum. Bitcoin has lost it, said Balaji Srinivasan of 21, while eth keeps attracting new innovative projects, such as Numerai, a crowdsourced hedge fund.
It is further building its own ecosystem, with ICOs sold out in minutes, a phenomenon some are calling a new gold-rush, while at the same time, it stands in front of what some call a fourth industrial revolution.
