Bitcoin gets competition from rival virtual currencies
The Bitcoin is not the only digital currency around. A report on The New York Times' The Dealbook introduced the different kinds of virtual currencies that are in Bitcoin's orbit. Alternatives to the most popular digital money, which recently surpassed the USD 1,000 mark, include the PeerCoin, LiteCoin and anoncoin and its backers tout the benefits they hold over the Bitcoin.
Lawrence Blankenship, a software engineer, is betting on PeerCoin. He told The New York Times' The Dealbook, "Looking down the road 10 years from now, I definitely see bitcoin being ousted. Everyone's going to start switching to other coins, and hopefully PeerCoin comes out ahead in that." Blankenship's belief in PeerCoin has led him to arrange for it to be made a virtual currency of choice for a Star Trek convention he is putting together in his hometown.
The report said there are 60 different virtual currencies traded on Cryptsy, an exchange for digital currency. And programmers and mathematicians continue to release new currencies on a close to weekly basis.
The rise in value of the Bitcoin has also fueled the increase in value of its rival currencies. For instance, all the PeerCoins that were already mined were valued close to USD 40 million last week. Another entrant to the field is Litecoin, created by former Google programmer Charles Lee. Now considered as the second most popular digital money, Litecoin had an estimated total value of USD 250 million as of last week.
Unlike the other creators of digital currencies who kept their digital currencies and then cashed them out as soon as its value increased, Lee said he did not have any coins when he released Litecoin. He added that Litecoin did not wish to replace bitcoin. Instead, he viewed Litecoin as the silver to Bitcoin's gold.
He told The New York Times' The Dealbook, "People like choices. You want to diversify your crypto-currency investments."
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