In the 21st century, money is no longer limited to bills, coins and credit cards. In fact, some money is truly international -- not owned by any particular government -- and regulated by the people instead of a central entity. It also exists wholly on the internet. This type of money is called cryptocurrency. <\/p>\n
You may have heard of or even used Bitcoin when it first became popular several years ago, but where Bitcoin used to rule, other cryptocurrencies are now being used to pay back family members for lunch, charge customers for products and services and make other everyday transactions. As an entrepreneur, its important to keep an eye on the most commonly-used cryptocurrencies. Here are six I think you should know about. <\/p>\n
Rather than competing with Bitcoin like many other cryptocurrencies, Ethereum complements it; while the Bitcoin blockchain network tracks ownership of its own currency, the Ethereum blockchain runs programming codes for its users applications. People use Ethereum to create custom (but trustworthy) crowdfunding platforms, autonomous online organizations and even their own cryptocurrencies. Because these applications are decentralized, they can only be built in the Ethereum network. <\/p>\n
Though Ether, the network's money,wasnt made to be used for everyday payments, anything of value can be traded for products and services; as a result, many developers use it to pay for each others help in building applications. <\/p>\n
However, most online stores that accept cryptocurrency do not take Ether. <\/p>\n
Related:11 Ways to Make Money While You Sleep <\/p>\n
If Bitcoin were gold, Litecoin would be silver. Litecoin works just like its more popular counterpart, but its worth a little less -- there are 21 million total Bitcoin in existence and 84 million Litecoin. Litecoin are easier to mine and quicker to move from person to person due to its faster block generation. It is perhaps the least intimidating cryptocurrency for those who are new to exchanging money online: Litecoins wallet can be downloaded fromthe official Litecoin website, and its fully encrypted to prevent accidental spending and computer viruses. This is a super simple network for those who need to move smaller amounts of money fast. <\/p>\n
While other cryptocurrencies avoid banks, Ripple embraces them. In fact, Ripple was made for banks, as it allows them to make faster, low-cost, on-demand global payments of any size. Traditional cross-border transactions require banks to go through an intermediary (or often several), which delays completion. Ripple offers a faster and more direct alternative. When a bank customer in the US wants to send a payment to a different bank customer in China, for example, Ripple immediately queries both banks for their transaction fees and makes the transfer in a matter of minutes. It even updates both customers ledgers right away so they can view their balances following the transaction. This unique cryptocurrency enables banks to offer new and improved payment products, and it simplifies regular transactions for consumers around the world. <\/p>\n
Related:Habits of the World's Wealthiest People (Infographic) <\/p>\n
Though Dash can be used for transactions between consumers, it was made for shopping. Think of Dash as a replacement for PayPal. Many merchants accept Dash just as they do USD, but the transaction is faster -- you dont have to wait a day or two to see the payment charge to your account. Like any other cryptocurrency, you can buy Dash using government-regulated currency and keep it in a designated Dash wallet until youre ready to spend it at a compatible merchant. You may even consider adding your own business to the merchant map! <\/p>\n
If you want to maximize your confidentiality, this cryptocurrency is for you. Zcash has been dubbed the first zero-knowledge cryptocurrency with its ability to shield the identities of all senders, recipients and values. Each transaction is fully encrypted, so users can enjoy the advantages of a public blockchain without offering up private information. Many view Zcash as a more confidential version of Bitcoin. <\/p>\n
Related:5 Habits of the Wealthy That Helped Them Get Rich <\/p>\n
Monero is another excellent cryptocurrency option for those concerned about their privacy. This currency was designed to give individual users full control over their money; with Monero, you are your own bank. Transactions are selectively transparent, meaning you decide who can and cant see where your money is going. Crises faced by banks and governments wont affect your assets or compromise confidential information. Finally, like many cryptocurrencies, Monero is decentralized and community-built -- over thirty developers have directly contributed to Monero so far. <\/p>\n
If your business doesnt use any of these cryptocurrencies already, you may want to start incorporating them soon. When it comes to online financial transactions, cryptocurrencies like the ones above have quickly started to give PayPal, Stripe and other payment systems a run for their money. <\/p>\n
Cryptocurrency transactions arent validated by a central entity, meaning there are no bank or platform fees associated with payments -- just optional, minute fees (one percent or less) that speed up the transaction. You also dont have to wait nearly as long to receive cryptocurrency as you may with traditional money. <\/p>\n
Again, a cryptocurrency'smost important feature might be that it'struly international; no particular government owns or regulates it. This means there are no fees for payments that cross borders, and the transaction works the same no matter where you or the other party are located. <\/p>\n
The only major disadvantage to cryptocurrency is the need to sell it for USD (or any other government currency). However, this process closely imitates the way youd transfer PayPal funds to your checking account. <\/p>\n
Matthew Toren is a serial entrepreneur, mentor, investor and co-founder of YoungEntrepreneur.com. He is co-author, with his brother Adam, of Kidpreneurs and Small Business, BIG Vision: Lessons on How to Dominate Your Market from Self-Made E... <\/p>\n
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