Bitcoin vs. Scotcoin – the Scottish cryptocurrency alternative
Itâ€™s becoming very hard to ignore cryptocurrencies. Whether youâ€™re a cryptocoin enthusiast or a confirmed sceptic, itâ€™s clear that they are here to stay. They might never replace traditional currencies but will have their part to play in the world of finance.
However, Caroline Wylie, at Scotcoin tells us that the rise in Bitcoin has had a profound effect on the very nature of Bitcoin. Increased transaction charges are pushing up the cost of working in cryptocurrencies - as she says: â€œYour cup of coffee at Â£3 looks rather different when it becomes Â£7 by the time you pay for it. Why would you pay such a high premium just to use Bitcoin as a currency? It makes smaller transactions completely uneconomic.â€
Bitcoin Transaction charges
Why are the charges so high? Itâ€™s down to the success of Bitcoin. This has led to a steep increase in the number of transactions. The way Bitcoin verifies those transactions requires rewards for the miners who do the work - they get paid in Bitcoin, so the more transactions there are, the more miners are needed and transaction fees go up.
The standard charge for a transaction is 0.0005 BTC or 0.50 cents at $1,000 per BTC. This number can fluctuate depending on how fast you want the transaction to happen.
However, today, with Bitcoin over $11,000, even if the standard charge is around $3.50 it will require 99 blocks to process and confirm the transaction. 99 blocks is the equivalent of up to 17 hours. If you want the transaction to be faster youâ€™re looking at:
0.0006 BTC or $4.20 for 15 blocks
0.0007 BTC or $4.90 for 2 to 5 blocks
The alternative - Scotcoin
Scotcoin intends to move from the Bitcoin blockchain to its own permissioned blockchain to remove the those high transaction charges and speed up how fast those transactions are confirmed. The new blockchain can deal with transactions in seconds with a cost thatâ€™s only a very small fraction of the charge one would pay with the Bitcoin blockchain. So not only is it cheaper, it's faster making retail use of cryptocurrencies a reality.
Scotcoin has already done a small trial of using digital currencies to buy beer in the Arlington Bar in Glasgow. And initial tests on the new blockchain are producing exciting speeds. More updates soon.
About the author:
Scotcoin is a cryptocurrency established in 2014 by Derek Nisbet, a Scottish fintech entrepreneur. It currently operates on the Bitcoin blockchain using the Counterparty protocol and has a market value of $25 million USD placing it in the top 200 of global crypto currencies as measured by the USD value.
In 2016 all intellectual property associated with Scotcoin was acquired from Nisbet by Scottish fintech investors, David Low and Temple Melville.
The investors' desire is for the Scottish Government to adopt Scotcoin as the country's unofficial crypto currency. It is acknowledged that currency is not a devolved responsibility whilst Scotland remains part of the UK. Scotcoin could only become an official currency if Scotland was independent of the UK or current legislation was changed.