Bitcoin’s seemingly unstoppable surge to record highs isn’t deterring competitors.
Former Silicon Valley developers are working on at least two new versions of the digital currency. Basecoin is seeking to solve bitcoin’s volatility with a team of former Google coders that are building what they hope will be a more stable version of the cryptocurrency. Cypherium has former Google, Amazon and Microsoft developers building a blockchain that aims to be able to handle an expanded workload more easily.
Competition isn’t new for bitcoin as there are over 1 000 different blockchains, the technology used for verifying and recording transactions that’s at the heart of bitcoin. While many rivals such as ethereum also provide applications, others like zCash and monero already say they’re trying to improve upon the first and biggest cryptocurrency.
So far they haven’t succeeded in dethroning bitcoin. After briefly dipping below 50% of the total cryptocurrency market, bitcoin is back at its dominant position.
“When you have a whole new industry, competitors within that industry aren’t really competing with each other, they’re competing with the old industry and generally all boats rise together,” said Peter Van Valkenburgh, research director at Coin Centre.
Basecoin’s investors include venture-capital firms Andreessen Horowitz, PolyChain Capital, Pantera Capital and Mark Cuban-backed 1confirmation, among others. The team aims to develop a central bank that’s based on algorithms, performing similar money supply regulation functions done by the Federal Reserve, except it’s on the blockchain, requiring no human discretion. The hope is to have a stable currency that will make commerce more viable than can be conducted given bitcoin’s wild price swings.
In the Cypherium blockchain, developers write smart contracts and do governance work off-chain, so that all the power can be dedicated to transactions. The aim is for the cryptocurrency to handle thousands of transactions per second, compared with bitcoin’s fewer than 10.
Newcomers will have a lot of catching up to do, as bitcoin continues to break new records, now towering above $5 000, as it shrugs off splits on its blockchain that stem from disagreements on fixing the very problems these new cryptocurrencies say they solve.