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09/12/2013 by
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Tesla Accepts Bitcoin, Bitcoin Copycats Jousting For Position

Bitcoin the godfather of crypto-currencies reached another milestone in early December. Lamborghini Newport Beach announced on its blog that it took payment for a Tesla Model S electric car with Bitcoin.

Lamborghini Newport Beach announced on its blog that took payment for a <strong>Tesla Model S</strong> electric car with Bitcoin. - by Igor Beuker for ViralBlog.com

The company said via its blog that it will continue accepting Bitcoin from future customers and looks forward to the opportunities that will come with it.

Bitcoin, as of December 5, is trading for around $1,000, just two weeks after Federal Reserve Chairman Ben Bernanke declared that virtual currencies “may have long-term promise.”

Since Bitcoin is decentralized, it’s difficult to apply the concepts of Moody’s Analytics stress testing to determine its staying power.

But Monica Gagnier, an economics writer for Moody’s, predicts that Bitcoin will likely never be more than an unsustainable “niche hobby” due to the tediousness of transactions and inevitable regulations.

Despite skepticism from industry experts, there are at least 144 other crypto-currencies currently being traded, according to Com-Http, a digital currency tracking website. Here are three (less expensive) options potential investors can look into.

Litecoin

There are two major differences between Litecoin and Bitcoin. The previous can be mined by just about anyone who has a laptop computer and Internet connection.

Photo by btckeychain via Flickr

Litecoin algorithms were originally designed by mathematician Dr. Colin Percival for the cloud-based online backup service Tarsnap. The protocols are simple, unlike Bitcoin’s block chains that require an investment of a few thousand dollars for the necessary mining equipment.

Bitcoin is widely accepted by thousands of merchants all over the world. Litecoin has a long way to go to catch up, but is still the top alternative to Bitcoin. A Litecoin transaction is also much faster to complete than Bitcoin’s 10-plus minute average.

It sells at about $40 per unit as of December 5. It is currently third behind Bitcoin and Ripple for market cap, with a total current value of in-circulation coins of about $900 million.

Namecoin

Bitcoin boasts privacy and anonymity with all transactions. But a well-trained hacker with a lot of time on his hands could very well determine the origin of any Bitcoin transaction.

Namecoin, on the other hand, is 100 percent untraceable. Not only does it use the same peer-to-peer cryptography as Bitcoin and Litecoin, but also operates on a de-facto independent Internet.

Namecoin acts much like a proxy server, translating domain names into a language only a machine can read during transactions. Namecoin thus operates outside of the influence of ICANN, the global overseer of the entire Internet.

Namecoin currently sells at about $8.50, with about $100 million worth currently in circulation. The total number of Namecoins that can ever exist is 21 million, the same limit for Bitcoin.

Primecoin

The biggest difference between Primecoin and Bitcoin (besides the price) is the way they are created.

Like its name suggests, Primecoin is mined by searching out chains of prime numbers. Sunny King, the creator of Primecoin, wanted to develop an alternative to the “hashcash” proof-of-work design used by Bitcoin and most other crypto-currencies.

Instead of a fixed cap for the possible number of Primecoins, King posits that Moore’s law will naturally limit the number of Primecoins in circulation.

Named after Intel co-founder Gordon Moore, the law as applied to Primecoin would limit the total number of prime number chains based on technological advancements in processing speeds and circuitry for computers.

Primecoin currently trades for about $5.

My Opinion

Two days ago I wrote about Bitcoin Mania. The Chinese Bank saying no to Bitcoin and the Bank of America saying yes to Bitcoin.

Now Tesla says yes to Bitcoin. Have I changed my mind about Bitcoin?

Nope I have not. When it comes to Bitcoin, Litecoin or Primecoin my advice is to stay out.

There are plenty of better investments out there. Pick some very smart start-ups via i.e. Kickstarter for example.

What About You?
Would you invest your money in Bitcoin, Litecoin or Primecoin? We’d love to hear your why.

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About the Author
Igor Beuker is a serial entrepreneur, acclaimed trendwatcher & speaker, marketing consultant and advisory board member at several disruptive media, technology and entertainment firms. Book Igor as keynote speaker, follow Igor on Twitter or contact him via LinkedIn.

 

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