While prices for Bitcoin and Ethereum have steadied in recent weeks, there have been notable moves in other large-cap cryptocurrencies as the market develops.
By market capitalisation, the top three cryptocurrencies are Bitcoin, Ethereum and Bitcoin Cash.
That hasn’t changed since Bitcoin split on August 1, but other key players have seen significant volatility. Prices for Ripple, Litecoin and Dash have all had notable price-moves in August.
Last week, Ripple — the world’s fourth biggest cryptocurrency — almost doubled in value to a high of more than US28 cents, on a surge in demand from South Korean and Japanese markets.
Those gains were short-lived though, and earlier today the cryptocurrency was trading at just below US22 cents.
At current prices, Litecoin rounds out the top five with a market capitalisation of just under $US3 billion.
Litecoin was launched on October 2011 and operates on similar blockchain technology to Bitcoin, although with faster processing speeds. As with Bitcoin, only a finite number of Litecoin (84 million) can be mined.
The currency saw strong demand over the weekend, rising in value from around $US50 to more than $US62 a short time ago.
Litecoin’s rise knocked Dash back to sixth, but it briefly climbed into the top five cryptocurrencies by market capitalisation last week, and remains near record highs.
Over the two weeks since August 15, the price of Dash more than doubled from $US197 to a high above $US397, before cooling off slightly:
Dash was established in January 2014, and the total number of coins that can be mined is capped at around 18 million.
Unlike Bitcoin, Dash utilises a two-tier network. Operations are split between miners and members of the network which validate and approve blockchain transactions, known as “nodes”.
While miners on the Bitcoin network also perform the node function, master nodes on the Dash network are run by separate participants.
To create an incentive system for nodes to help the network run smoothly, the value of each new block on the blockchain is attributed equally — 45% to miners and 45% to the master node. The remaining 10% goes into a joint pool of funds held by the network.
Like Ripple, Dash’s recent increase has been driven by rising demand from Asian markets, according to CEO Ryan Taylor.
“High trading volumes are attracting exchanges throughout Asia to inquire about adding Dash trading pairs, so I think we’re only witnessing the beginning of the growth coming from that region,” Taylor told Business Insider.
The price action suggests that significant demand is shifting around between different cryptocurrencies
Indeed, Dash’s price increase against Bitcoin has followed a similar path to its rise against traditional fiat currency the US dollar:
While the debate about what cryptocurrencies are actually worth rages on, the ability of blockchain technology to change the way transactions are made will be worth monitoring.
“In the beginning stages, digital currencies are being used as a lower-cost alternative for existing payments,” Taylor said.
A research report last week by Morgan Stanley argued that cryptocurrencies will have some impact on global transaction networks, but they won’t be fully disruptive.
One aspect that will slow the impact of cryptocurrencies, the analysts said, was the increasing amount of attention being paid by regulators as the market develops.
Morgan Stanley also said that it will take time for new digital currencies to build up trust among consumers before they can be recognised consistently as a new way to pay for goods and services.
Amid a constant flurry of new initial coin offerings (ICOs), it will be interesting to monitor which cryptocurrency networks are best placed to gain from the advances in transaction technology.
There’s no doubt that investors are paying close attention to the new space.
“Things will become much more interesting when new business models and products emerge that leverage the unique attributes of digital currencies. When the cost of a transaction sent anywhere in the world approaches zero, it opens new possibilities for commerce we haven’t even thought of yet,” Taylor said.
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