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5 Great Alternatives to Bitcoin

By U.S. News & World Report

Bitcoin has been center stage in recent weeks due to its soaring value. Investors who think more than $19,000 per bitcoin is too steep today may kick themselves for not getting in when the cryptocurrency traded around $7,000 about a month ago, $2,000 last spring, or less than $1,000 this time last year.

Of course, you don’t have to buy a whole bitcoin. The numerous exchanges that trade bitcoin for dollars, yen, euro or other currency are happy to buy or sell tiny slivers — a 10th of a coin, or a 100th, or less.

But there’s an alternative that might appeal to investors who think the skyrocketing price makes bitcoin more likely to fall than rise: buy another cryptocurrency like ethereum, ripple, litecoin, IOTA or dash.

The website Coinmarketcap.com lists 920 “altcoins.”

[See: 7 of the Best Stocks to Buy for 2018.]

“The cryptocurrency space has an amazingly bright future,” says Paul Snow, co-founder of the Texas Bitcoin Association, a trade group. “There isn’t one kind of car, one kind of currency, one kind of house, one kind of crop. Different blockchains and currencies have different target uses, and they are likely to prosper in their different applications.”

For now, though, bitcoin is king.

“It’s hard to envision any alternative cryptocurrency dethroning bitcoin in the near future,” says Eric M. Jackson, CEO and co-founder of CapLinked, a data-sharing service for businesses. “However, bitcoin does face a number of scaling issues that will need to be resolved for its longer-term viability — specifically, transaction processing costs, speed, and energy requirements will need to be addressed.”

Many bitcoin alternatives are designed to tackle those problems, but experts recommend choosing with caution, as features vary and the fever for digital currency could break entirely, dashing bitcoin and all the wannabes, too.

What bitcoin and its competitors share is an existence in the ether, as a digital code rather than metal coins or paper bills. Beneath these currencies lies a technology known as blockchain that keeps a record of all transactions without an authority like a central bank. Advocates say cryptocurrency is thus free of meddling that changes the amount of currency in circulation, like when the U.S. Federal Reserve adjusts supply to spur economic growth or curb inflation. Free of such interference, digital currency can rise and fall with supply and demand in a worldwide marketplace. Blockchain serves users who don’t necessarily trust one another.

For any alternative coin to have lasting value as a true currency, it must go into widespread use, says Chris Ahmad, CEO of Dragon Corp., a firm developing altcoin for the gaming industry.

Bitcoin has value because it is useful as a form of money, Ahmad says.

“Bitcoin has the characteristics of money — durability, portability, fungibility, scarcity, divisibility, and reconcilability — based on the properties of mathematics rather than relying on physical properties like gold and silver or trust in central authorities like fiat currencies­,” he says. “With these attributes, all that is required for a form of money to hold value is trust and adoption. In the case of bitcoin, this can be measured by its growing base of users, merchants, and startups. As with all currency, bitcoin’s value comes only and directly from people willing to accept them as payment.”

[See: 7 of the Best Dividend Stocks to Buy for 2018.]

But as currency for buying goods and services, bitcoin has a long way to go, and the contenders even further. For now, bitcoin is primarily a speculative asset. People buy it because they think others will someday pay more, a process known as the greater fool theory when prices zoom.

So cryptocurrency values depend largely on forces of supply and demand, and among the issues is whether supply is really as limited as true believers say.

The founding program limits the number of bitcoin that can be created, or “mined” to 21 million, for example. But there’s no limit to how small the fractions of a coin can be. While a 1,000th of a TV set would likely be worthless, 1,000th of a bitcoin is now worth more than the first bitcoin ever mined. If the supply of bitcoin fractions is unlimited, how will that affect the supply-and-demand equation that seems to be boosting the price gain?

Even if bitcoin survives and becomes more useful over the long term, current prices may signal a bubble. The system could someday be hacked, though the fact that it has not been so far despite the enormous financial incentive to do so suggests it’s pretty secure. And it could be dethroned by a usurper or cut down to size by onerous governmental regulation. This has already happened in China.

So here’s a rundown on some of the biggest bitcoin alternatives, ranked by market capitalization, the value of currency in circulation:

Ethereum. Running a distant second with a market capitalization of $68 billion versus bitcoin’s $281 billion, ethereum is traded by many of the exchanges that handle bitcoin. The currency is just part of a broader ethereum goal of creating “smart contracts” held on an array of “nodes” rather than a central server, speeding deal making and providing better security than the old-fashioned internet.

Ripple. With market cap around $29 billion, this is a system used mainly by financial institutions to send and receive currency in a decentralized way. It is claimed to be more secure than bitcoin and to offer great liquidity, which means buyers and sellers can trade as much as they want when they want.

Litecoin. With market cap of $14 billion, litecoin is a bitcoin offshoot, similar in most respects but said to allow transactions to be completed about four times faster than bitcoin. Advocates say this will become especially valuable if the bitcoin exchanges bog down under huge volume.

IOTA. Run by the nonprofit IOTA Foundation, this altcoin has a market cap $10.5 billion. This is another approach claiming an improvement on bitcoin’s blockchain system. IOTA founders say it is faster and can handle bigger transactions without problems.

Dash. This altcoin, with a $6.7 billion market cap, is meant to be more user-friendly than bitcoin, making it easier for ordinary people to send currency to one another almost instantaneously.

Below dash are the also-rans, with market caps that are miniscule by comparison. For investors, a chief concern would be whether there are enough buyers and sellers to allow one to complete a trade when desired.

[See: 7 Consumer ETFs for the Holiday Rush.]

Also, many of the little currencies may have been created by people just trying to jump on the cryptocurrency bandwagon while not really offering anything different or better. If that sounds familiar, think back to the dot-com frenzy of the late ’90s.

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5 Great Alternatives to Bitcoin originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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