Comparing Bitcoin, Ethereum, and Other Cryptos
View the high resolution version of today’s graphic by clicking here.
Unless you’ve been hiding under a rock, you’re probably aware that we’re in the middle of a cryptocurrency explosion. In one year, the value of all currencies increased a staggering 1,466% – and newer coins like Ethereum have even joined Bitcoin in gaining some mainstream acceptance.
And while people like Jamie Dimon of J.P. Morgan and famed value investor Howard Marks have been extremely critical of cryptocurrencies as of late, many other investors are continuing to ride the wave. As we’ve noted in the past, the possible effects of the blockchain cannot be understated, and it could even change the backbone of how financial markets work.
However, even with the excitement and action that comes with the space, a major problem still exists for the layman: it’s really challenging to decipher the differences between cryptocurrencies like Bitcoin, Ethereum, Ethereum Classic, Litecoin, Ripple, and Dash.
For this reason, we worked with social trading network eToro to come up with an infographic that breaks down the major differences between these coins all in one place.
A Description of Major Coins
Here are descriptions of the major cryptocurrencies, which make up 84% of the coin universe.
Bitcoin is the original cryptocurrency, and was released as open-source software in 2009. Using a new distributed ledger known as the blockchain, the Bitcoin protocol allows for users to make peer-to-peer transactions using digital currency while avoiding the “double spending” problem.
No central authority or server verifies transactions, and instead the legitimacy of a payment is determined by the decentralized network itself.
Bottom Line: Bitcoin is the original cryptocurrency with the most liquidity and significant network effects. It also has brand name recognition around the world, with an eight-year track record.
Litecoin was launched in 2011 as an early alternative to Bitcoin. Around this time, increasingly specialized and expensive hardware was needed to mine bitcoins, making it hard for regular people to get in on the action. Litecoin’s algorithm was an attempt to even the playing field so that anyone with a regular computer could take part in the network.
Bottom Line: Other altcoins have taken away some of Litecoin’s market share, but it still has an early mover advantage and some strong network effects.
Ripple is considerably different from Bitcoin. That’s because Ripple is essentially a global settlement network for other currencies such as USD, Bitcoin, EUR, GBP, or any other units of value (i.e. frequent flier miles, commodities).
To make any such a settlement, however, a tiny fee must be paid in XRP (Ripple’s native tokens) – and these are what trade on cryptocurrency markets.
Bottom Line: Ripple runs on many of the same principles of Bitcoin, but for a different purpose: to serve as the middleman for all global FX transactions. If it can successfully capture that market, the potential is high.
Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralized applications.
In the Ethereum blockchain, instead of mining for bitcoin, miners work to earn ether, a type of crypto token that fuels the network. Beyond a tradeable cryptocurrency, ether is also used by application developers to pay for transaction fees and services on the Ethereum network.
Bottom Line: Ethereum serves a different purpose than other cryptocurrencies, but it has quickly grown to displace all but Bitcoin in value. Some experts are so bullish on Ethereum that they even see it becoming the world’s top cryptocurrency in just a short span of time – but only time will tell.
In 2016, the Ethereum community faced a difficult decision: The DAO, a venture capital firm built on top of the Ethereum platform, had $50 million in ether stolen from it through a security vulnerability.
The majority of the Ethereum community decided to help The DAO by “hard forking” the currency, and then changing the blockchain to return the stolen proceeds back to The DAO. The minority thought this idea violated the key foundation of immutability that the blockchain was designed around, and kept the original Ethereum blockchain the way it was. Hence, the “Classic” label.
Bottom Line: As time goes on, Ethereum Classic has been carving out a separate identity from its bigger sibling. With similar capabilities and a different set of principles, Ethereum Classic could still have upside.
Dash is an attempt to improve on Bitcoin in two main areas: speed of transactions, and anonymity. To do this, it has a two-tier architecture with miners and also “masternodes” that help the network perform advanced functions such as near-instant transactions and coin-mixing to provide additional privacy.
Bottom Line: The innovations behind Dash are interesting, and could help to make the coin more consumer-friendly than other alternatives.
Bonus: Bitcoin Cash
Although not included in the graphic, we also wanted to add a quick word on Bitcoin Cash. This new currency “hard forked” from Bitcoin about a month ago, as a result of miner disagreements about the future of Bitcoin. Here’s a detailed summary of the announcement.
10 Types of Innovation: The Art of Discovering a Breakthrough Product
How do companies like Amazon and Apple consistently make game-changing products? Here are 10 types of innovation, and the tactics that lead to big breakthroughs.
The Art of Discovering Breakthrough Products
As venture capitalist Peter Thiel once put it, “competition is for losers”.
It’s inevitable that every company out there must be out there battling for market share, but you don’t really want to be in a situation where the competition is so stiff that any potential upside is eroded away in the process—a scenario known as perfect competition in economics.
To avoid perfect competition, companies must strive to build an economic moat that gives them a sustainable competitive advantage over time. While these protective moats can arise from a number of different sources, in today’s information economy they most often arise from the power of innovation.
But where does innovation come from, and is there a universal framework that can be applied to help consistently make big breakthroughs?
The 10 Types of Innovation
In today’s infographic, we showcase the culmination of years of in-depth research from Doblin, an innovation-focused firm now owned by Deloitte.
After examining over 2,000 business innovations throughout history, Doblin uncovered that most breakthroughs don’t necessarily stem from engineering inventions or rare discoveries.
Instead, they observed that innovations can be categorized within a range of 10 distinct dimensions—and anyone can use the resulting strategic framework to analyze the competition, to stress test for product weaknesses, or to find new opportunities for their products.
Here are the 10 types of innovation:
|1.||Profit Model||How you make money|
|2.||Network||Connections with others to create value|
|3.||Structure||Alignment of your talent and assets|
|4.||Process||Signature of superior methods for doing your work|
|5.||Product Performance||Distinguishing features and functionality|
|6.||Product System||Complementary products and services|
|7.||Service||Support and enhancements that surround your offerings|
|8.||Channel||How your offerings are delivered to customers and users|
|9.||Brand||Representation of your offerings and business|
|10.||Customer Engagement||Distinctive interactions you foster|
From Theory to Practice
What does innovation look like in practice?
Let’s see how well-known businesses have leveraged each of these 10 types of innovation in the past, while also diving into the tactics that modern businesses can use to consistently make new product breakthroughs:.
Innovation Types #1-4: “Configuration”
According to Doblin, the first four types of innovation center around the configuration of the company, and all the work that happens “behind the scenes”.
Although innovation types in this category are not directly customer-facing, as you can see in the examples below, they can still have an important impact on the customer experience. How your company and products are organized can have a crucial downstream effect, even enabling innovations in other categories.
Two of the most interesting examples here are Google and McDonald’s. Both companies made internal innovations that empowered their people to make important advancements further on downstream.
In the case of McDonald’s, the franchisee insight that led to the introduction of the Egg McMuffin spearheaded the company’s entire breakfast offering, which now accounts for 25% of revenues. Breakfast is also now the company’s most profitable segment.
Innovation Types #5-6: “Offering”
When most people think of innovation, it’s likely the offering category that comes to mind.
Making improvements to product performance is an obvious but difficult type of innovation, and unless it’s accompanied by a deeply ingrained company culture towards technical innovation, such advancements may only create a temporary advantage against the competition.
This is the part of the reason that Doblin recommends that companies focus on combining multiple areas of innovation together—it creates a much more stable economic moat.
Apple has a reputation for innovation, but the product ecosystem highlighted above is an underappreciated piece of the company’s strategy. By putting thought into the ecosystem of products—and ensuring they work together flawlessly—additional utility is created, while also making it harder for customers to switch away from Apple products.
Innovation Types #7-10: “Experience”
These types of innovation are the most customer-facing, but this also makes them the most subject to interpretation.
While other innovations tend to occur upstream, innovations in experience all get trialed in the hands of customers. For this reason, intense care is needed in rolling out these ideas.
In the early days of the internet, online shipping was precarious at best—but Amazon’s introduction of Amazon Prime and free expedited shipping for all members has been a game-changer for e-commerce.
Executing on such a promise was no small task, but today there are 150 million users of Prime worldwide, including some in metro areas who can get items in as little as two hours.
Making Innovations Happen in Your Organization
How can organizations approach the 10 types of innovation from a more tactical perspective?
One useful resource is Doblin’s free public list of over 100 tactics that correspond with the aforementioned framework.
The one-pager PDF provides a range of typical dimensions for approaching each type of innovation. In essence, these are all different ways you could consider when trying to differentiate your product or service—and at the very least, it provides a useful thought experiment for managers and marketers.
Visualizing the Rise of Digital Payment Adoption
By 2023, digital transaction values could reach $6.7T globally—catalyzed by digital commerce and mobile payments. COVID-19 is only accelerating this trend.
Digital Payments: The Evolution of Currency
Over the last decade, the digital payments landscape has undergone a structural shift.
Consumer behaviors are changing—moving towards contactless and cashless transactions. Meanwhile, as the magnitude of COVID-19 grows, these trends have only accelerated.
Today’s infographic navigates the digital payments ecosystem, exploring its history and innovative technologies, and how it continues to grow as a solution of choice for trillions of dollars of transactions each year.
Digital Payments Timeline
The origins of digital payments began over 25 years ago with then 21 year-old entrepreneur Dan Kohn in Nashua, New Hampshire, who sold a CD over the internet via credit card payment.
- 1994: First online purchase is made
A CD of Sting’s Ten Summoner’s Tales is sold for $12.48 on NetMarket.
- 1997: First mobile payments and first contactless payments
Coca-Cola installs two vending machines in Helsinki that accept payment by text message.
- 1999: Paypal launches electronic money transfer service
Early on, PayPal’s user base grew nearly 10% daily. Tesla CEO Elon Musk and venture capitalist Peter Thiel were among its co-founders.
- 2003: Alibaba launches Alipay in China
Today, the mobile payment platform has witnessed stunning growth — leveraging digital wallets accepted by merchants in over 50 countries and regions.
- 2007: M-PESA creates the first payments system for mobile phones
Kenya-based M-PESA launched its mobile banking and microfinancing service. Today, it has over 37 million active users on its platform across Africa.
- 2009: Bitcoin enables secure, untraceable payments
Satoshi Nakamoto develops the first decentralized payment network in the world.
- 2013: WeChat Pay is rolled into the popular messaging platform
By 2018, it surpasses 800 million monthly active users.
- 2014: Apple Pay launches
By 2023, over $2 trillion of mobile payment transactions could be authenticated by biometric technology.
As technological advances continue to unfold, advances in digital payment technologies are creating ripple effects globally.
Geographical Differences in Adoption
Unsurprisingly, the sheer volume of digital payments has continued to grow at a double-digit pace, now surpassing the $4.1 trillion mark.
How do cashless payments break down across different countries?
|Country||Daily Average Volume of Cashless Payments||Average Annual Cashless Payments Per Person|
Singapore has the highest number of cashless payments per individual, averaging 831 cashless payments annually. The country’s robust e-commerce market is supported by high-speed, reliable internet and a young, tech-savvy population.
With e-commerce spending accounting for about 6% of South Korea’s national GDP, it is another leading purveyor of a cashless society. Meanwhile, Sweden is projected to become a cashless nation as early as 2023.
Pivotal factors—including core infrastructure, consumer behavior and rising revenues—provide a glimpse into the rapidly changing payment horizon.
The Future of Digital Payments
As transactions rise, a number of other technological innovations could be instrumental to shaping the evolution of the digital payments industry:
- Messaging-app payments
Facebook Messenger, WhatsApp, and WeChat can leverage the reach of billions of users.
- Voice-activated commands
Paying for gas, groceries, or retail via voice could soar.
- Peer-to-peer (P2P) payments
Bank of America and Visa are investing heavily into P2P partnerships.
Over one million transactions take place daily on average.
- Biometric payments
Smartphone biometric security features could spur traction across digital payments.
- Facial recognition
May soon replace QR codes across retail, transit, and airports in China.
- Crypto wallet adoption
Blockchain wallet users are predicted to soar to 200 million by 2030.
- Hardware & in-store interfaces
Square, Stripe, and Clover are driving new mobile processing integrations.
The $4.1T digital payments ecosystem is facing a notable transition, catalyzed by a wave of global advancements and disruption. As the industry continues to widen its reach, consumers and investors alike can benefit from the shift towards a cashless economy.
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