Ethereum 101

Early Alternative Cryptocurrencies



After Bitcoin officially launched in 2009, a number of other cryptocurrency projects launched similar concepts. Most used some variation on the Bitcoin code, usually with minor changes to the rules of the network. While their creators were usually outspoken software developers or enthusiasts within the online community, these new forms of currency quickly took hold. It became apparent that experimentation in this sector could be quite profitable.

Litecoin

Created on October 7, 2011, by Charlie Lee, a former Google employee. Litecoin was a fork of the Bitcoin Core client, differing primarily by having a decreased block generation time (2.5 minutes), increased maximum number of coins, a different hashing algorithm, and a slightly modified graphic user interface.

Monero

Monero was created in 2014, and provides a more discreet version of the Bitcoin protocol. Monero created a new protocol to make the transaction history of payments more difficult to trace, and has seen substantial growth in support of this feature.

Dogecoin

In some cases, it's proven that it is not as important to innovate technically as it is to build a community around common goals. Dogecoin is essentially a complete clone of the Bitcoin protocol. It can even be mined simultaneously with it, which means it has a very small overhead cost. Dogecoin was intended to immortalize the Shiba Inu 'doge' meme, and has gathered quite a bit of support. In 2014, the Dogecoin community made waves by helping to send the Jamaican bobsled team to the Olympics. (This actually happened, we're not kidding!)

UPDATING THE BITCOIN CHAIN

After the 2009 launch, Bitcoin was operating with a network of nodes willingly running the same software. The software had been distributed over the popular file sharing website Github, so changes to the code were discussed on moderated internet forums. Nodes on the network could then choose whether to run the new code, ensuring that no one person could take control. New ideas quickly began to circulate and even contradict one another, so more formal governance standards were implemented.

During the early part of 2014, developers began to propose new ways that the chain could be used. Among them, the idea of colored coins circulated. This concept proposed that the transaction data which was stored on the blockchain could be used to attribute value in units other than Bitcoin, which some consider to be the first altcoins. In the next lesson, we’ll explore how this idea was adapted to create the modern idea of blockchain systems.