It seems like everybody and his dog is trying to create a new digital currency to compete with Bitcoin these days. Considering how successful Bitcoin has been in such a short time, and how much money it has made for people who got in early, it is hardly surprising that other developers are trying to emulate some of this success – or that investors are closely watching all of these so called ‘alt coin’ for profitable high growth investment opportunities.

If this whole subject is completely new to you then here is the briefest, simplest summary I can manage: Bitcoin and the other alt coins are ‘cryptocurrencies’, which use peer to peer connections and cryptographic keys to manage, track and secure transactions without the need for central banks.

Most of the new alt coins have little new to offer, and are highly likely to have a short lifespan. But there are some developers building on the original Bitcoin innovation with their own, truly innovative systems which have something extra to offer. Although the market and technology is constantly changing, my top pick for the best alt coin investment in 2014 at the moment is Ripple and its XRP currency.

In actual fact Ripple is much more than a ‘cryptocurrency’ or ‘alt coin’ – it is positioning itself as a low cost currency trading platform and international payment system. It uses a peer to peer cryptocurrency to acheive this. The way the system works is that if you wanted to exchange British Pounds for US dollars you would buy XRP (the system’s own currency) with your GBP, and then sell them for US dollars. Because the distributed nature of the system, which is run on the computers of the community of users themselves, the costs for doing this are lower than traditional currency exchange. Other alt coins can also be built on and traded through the Ripple platform. For example, the NoFiatCoin is being launched – a new currency backed by precious metals which will appeal to ‘gold bugs’ and other members of the investment community who have long opposed fiat currency and lamented the end of the gold standard.

I think Ripple will be much more successful than regular alt coins because it offers genuine innovation which you won’t find elsewhere, and seems designed to appeal to a very wealthy market segment – currency traders and investors. Another reason I like Ripple is because it does away with the kind of professional ‘mining’ which is used for currency creation in Bitcoin and the other alt coins. This mining requires serious hardware making it out of reach for most ordinary people – but have instead introduced a giveaway system which includes the opportunity to get free XRP if you donate your computing power to valuable scientific research. An ordinary home PC is enough to do this and to get yourself started with some free currency!

Check out the Ripple website for more information, download the software, and open an account. Please feel free to comment here if you have any questions or problems. You can also find me on the Ripple Forum under the username ‘profitofthegods’.