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Ever heard of Bitcoins? I’m sure you have, I’ve talked about them multiple times. But even though Bitcoins are all the rage right now, you should know that there are other alternative cryptocurrencies out there.

Before I list down other cryptocurrencies, it’s best to first define what they actually are.

A cryptocurrency is basically a kind of virtual currency that uses a high level of encryption to create AND manage (store, transfer, make purchases, etc.) the currencies.

Unlike the U.S. dollar, cryptocurrencies are decentralized, which means they are not managed by a central exchange (i.e., a corporate or government institution).

Cryptocurrencies are mined using your computer. You run a program that looks for a certain combination of numbers (for bitcoins it’s a 64-number combination) and if it can find one, you will receive a unit of the cryptocurrency.

Below is a shortlist of cryptocurrencies that are currently being mined and in circulation online. Note that the list is by no means exhaustive.

Majors (huge market, high security):

  • BTC Bitcoin
  • LTC Litecoin
  • NMC Namecoin
  • PPC PPcoin

Minor (established, but small following):

  • DVC Devcoin
  • NVC NovaCoin
  • TRC Terracoin
  • FRC Freicoin
  • FTC FeatherCoin
  • IXC IxCoin

Now, I don’t have the time to describe each and every single one of these cryptocurrencies, so let’s just focus on Bitcoin’s biggest rival, Litecoin.

As of this writing, Litecoin is the second-largest cryptocurrency in the market after Bitcoin and is currently trading at roughly $2 per Litecoin. The virtual currency has quickly gained in popularity, with some even dubbing it the silver to Bitcoin’s gold.

The question is, what makes it different? After all, aren’t both Bitcoin and Litecoin the same darn thing?

In essence, yes, but there are certain characteristics that some miners find more appealing. They are:

Amount in circulation: One thing you should know about these decentralized cryptocurrencies is that by design, there will be a limited amount available to the world through mining. It is projected that 21 million Bitcoins will eventually be in circulation, which is much less than the projected 84 million Litecoins to come.

Transaction time: It only takes 2.5 minutes to do transactions using Litecoin, as compared to 10 minutes for Bitcoin. While the current daily volume of transactions using Litecoin is still very small, this could prove pivotal down the road should more and more consumers use it when purchasing items.

Security: Litecoins uses an algorithm called “scrypt” that not only makes it more secure (making it harder to replicate or steal) but easier to mine for everyday computers as well. Apparently, in order to break down this code, tons of memory will be needed, making it too expensive to actually try and counterfeit Litecoins.

With the increasing uncertainty surrounding the usual fiat currencies, cryptocurrencies seem to be gaining popularity. This means that they could become more accepted and commonplace in society, which will help prevent them from going under.

As they become more popular, more and more people may want to purchase them for speculation or investment purposes – just look at the incredible rise in Bitcoin value! Savvy businessmen have already taken notice of this and launched platforms where they can be more easily traded; Plus500 and Spreadex are examples of Bitcoin brokers.

You should know that a few companies, such as Bitifinex, Crypto St., and Coinstetter, are working on creating leveraged trading platforms for Litecoin, so it may only be a matter of time till we see LTC/USD on your forex trading platform!