In Bitcoin’s Orbit: Rival Virtual Currencies Vie for Acceptance

competitionbitcoin25 Nov 2013 / NYT – For many people, bitcoin seems like something from the day after tomorrow.

For Lawrence Blankenship, it’s already a thing of the past.

A software engineer from Springfield, Mo., Mr. Blankenship is putting his money on PeerCoin, one of the biggest of the virtual currencies that are being promoted as alternatives to bitcoin.

With mounting interest from prominent investors and growing acceptance from regulators, bitcoin — either the new gold or the next Dutch tulip craze, depending on who is being asked — is at the center of the virtual money universe. Yet there are dozens of digital alternatives, like PeerCoin, Litecoin and anoncoin, whose backers point to advantages they say their currency has over bitcoin.

PeerCoin, according to Mr. Blankenship, is closer than bitcoin to the perfect, communal money. Mr. Blankenship, who is 34, has arranged to accept PeerCoin as the virtual currency of choice at a Star Trek convention he is organizing in his hometown.

“Looking down the road 10 years from now, I definitely see bitcoin being ousted,” he said. “Everyone’s going to start switching to other coins, and hopefully PeerCoin comes out ahead in that.”

In the alternative galaxy of virtual currencies, newly created money can become worth millions of real dollars in a few months. All the PeerCoin in existence, for example, was worth nearly $40 million last week. Programmers and mathematicians release new entrants into the field almost every week. On one popular exchange, Cryptsy, 60 different coins can now be traded.

Almost all of these altcoins, as they are known, have fed on the stratospheric rise of bitcoin. Since the beginning of the month, the value of bitcoin rose to more than $900 at one point, from $200, and it is up 6,000 percent since the beginning of the year…… Read more

Picture credit: James Best Jr./The New York Times

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