Although cryptocurrencies have been around since the early 2000s, they became mainstream news in late 2017 when the price of a single bitcoin reached nearly $20,000. Since then long-time cryptocurrency fans and newbie investors alike have become more interested in bitcoin and its alternatives, or altcoins. There are more than 1,000 cryptocurrencies in existence today. Feathercoin is one that has the potential to become a significant player in the market given its unique characteristics, although anyone following Feathercoin news knows it has not been a smooth trajectory.
How Is Cryptocurrency Different from Traditional Currency?
To understand feathercoin, it helps to understand some basics about cryptocurrency. Cryptocurrency is a secure and low-cost way to conduct transactions globally. It is essentially digital cash or currency. It differs from other kinds of currency in many ways, including:
- It is created by lines of code that have monetary value
- Its transactions are encrypted with cryptography
- It is decentralized and unregulated, independent of any institution or government’s central bank
- A network of individuals who contribute their computer power, called miners, do the accounting work for cryptocurrencies
- Transactions are not reversible
- There is nothing physical you can hold; it is stored in a digital wallet or small personal database
- Each cryptocoin has a data ledger called a blockchain which is unique to each user and digital wallet
- This wallet can be stored offline on a hard drive (cold storage) or in the cloud (hot storage)
- The data ledgers are public, meaning people can see the history of your wallet (but not your name)
- Fees are much less than traditional banking and go to three services: mining pools, online cryptocoin exchanges and the servers which support the miners
- It is generally more secure against hacker attacks
- There is a risk of loss if you don’t back up your wallet after every transaction or if you lose your wallet’s password or key
- They trade on online exchanges such as Coinbase, Coinsquare, Kraken, Cex.io, ShapeShift, Poloniex, Bitstamp, CoinMama, Bitsquare, LocalBitcoin and Binance
The first well-known cryptocoin was bitcoin (BTC). Currencies that were developed after bitcoin, such as Litecoin (LTC), Feathercoin (FTC) and Ethereum (ETC/ETH) are called altcoins. FTC is a split off from LTC and differs from other cryptocoins in a few key ways. FTC has a maximum number of coins – 336 million – that is 16 times more than BTC and four times more than LTC. FTC’s average block time of around 60 seconds is much faster than that of LTC and BTC, resulting in faster confirmations.
While cryptocurrencies are seen to be more secure than other currencies, there are still some risks involved. With any investment, it’s important to understand the risks so that you can make a sound investment decision and not get caught up in the hype and headlines of soaring prices and overnight millionaires. The main threats include:
- Financial risk: The most obvious risk is losing money in your investment. Cryptocurrencies are more volatile than investments in stocks or bonds.
Given that it is a relatively new invention, and not a very well understood one at that, it’s not surprising that the market has seen such extreme speculation and volatility. The relatively small market capitalization and thinner trading volume – as compared to more stable and developed asset classes – can also magnify the swings in prices.
- Confirmation lags: Cryptocurrency transactions rely on a network of peer-to-peer computers. This process results in a few seconds lag before a transaction is confirmed. Some people may try to exploit this technical weakness and direct a cryptocoin to be spent twice but to different recipients.
- Dishonesty in mining pools: Mining uses an incredible amount of processing power, so it often makes sense to join a mining pool if you want to participate in this part of the process. Miners are typically paid for their services in cryptocoin, and if you are part of a pool, then the pool organizer will decide how to split up the payments. Given the lack of oversight, it’s merely the conscience of the pool organizers that keep them from taking more than their share.
- Unregulated exchanges: There is no Securities and Exchange Commission or Consumer Financial Protection Bureau for cryptocurrencies (yet?). While we have seen that all the regulations in the world can’t prevent a financial collapse, regulated exchanges do still have insurance and other preventative measures built in. Cryptocurrency exchanges are websites where you can trade in the digital currency or exchange it for fiat money. There are several favorite exchanges, but none of them are regulated and are susceptible to human error.
Despite these risks, the market has seen explosive growth in recent years. As it continues to evolve, and new players enter the field, we wouldn’t be surprised if talks of oversight became more common.
FTC was introduced on April 16, 2013 by lead developer Peter Bushnell. After being a miner for LTC and frustrated with its lack of progress, he decided to code a new coin himself. Although some considered it an LTC clone, it differs in that it is a hard fork from the LTC protocol. After a strong start, the currency encountered numerous problems. However, recent developments are promising. While it’s impossible to capture all FTC news and milestones, here is a brief timeline of some of the important events in the currency’s short and volatile history:
- April 2013: FTC launched based on 0.6.3 build of Litecoin
- April to May 2013: ~6 million coins mined in first three weeks due to low mining difficulty
May 2013: Added to BTC-e exchange, the leading exchange of the time (it would be de-listed twice)
- June 2013: Experienced a 51% attack, where a group of miners controlled more than half of the network’s mining power which could allow them to reverse transactions and double-spend coins
- July 2013: United Open Currencies Solutions Group (UNOCS) formed with Worldcoin and PhenixCoin with the idea to allow merchants to accept coins from all three while a background system would process the transactions
- August 2013: Advanced CheckPointing released to provide a feed of checkpoints to help make it less susceptible to attack
- September 2013: FTC no longer a part of UNOCS
- September 2013: FTC to USD became possible
- April 2014: Feathercoin wallet version 0.8.6.2 went live
- October 2014: Neoscrypt wallet version 0.8.7.0
- November 2014: Block Explorer updated
- June 2014: Bushnell left to work on other cryptocurrency projects
- 2015 to 2016: Broad weakness in BTC and altcoins triggered by hack of Mt. Gox exchange in early 2014
- December 2017: Bushnell announced his returned with intention of bringing core up to BTC standards
- March 2018: Feathercoin Development Foundation created to promote adoption of FTC
- Apri1 2018: First FTC block mined with SegWit, which increases the limit on block size
With Bushnell’s return and a general growing interest in cryptocurrencies, things are looking up for FTC. The lead developer’s focus on adding Lightning Network capabilities and becoming compatible with BarterDex could help increase FTC demand. The updates coming out of the Feathercoin Development Foundation are also promising.