The success of bitcoin has spurred the launch of hundreds of copycat digital payment systems looking to cash in on the popularity of the cryptocurrency.
But now a new generation of digital assets are gaining momentum, offering to do more with blockchain – the technology that powers bitcoin as a currency – than just allow a way to pay for things online using virtual Internet money.
Ethereum, one of the biggest cryptocurrencies after bitcoin, has emerged as one of these up-and-coming alternatives, says Bitaccess co-founder Moe Adham, whose company provides software services for financial technology businesses using blockchain.
"It's a different type of digital currency that has different properties and allows people to do interesting things," said Adham.
Even the Bank of Canada, together with several other partners, have started to look at whether blockchain technology could be used for wholesale payment systems to move enormous dollar amounts daily. They found that while it may be possible in the future, concerns over issues such as privacy must still be addressed.
Jean-Paul Lam, an associate professor in economics at the University of Waterloo, says bitcoin is but one application of blockchain technology, just like email is one application of the Internet.
He says Ethereum uses blockchain for "smart contracts," which are electronic versions of regular contracts that are automatically executed once all the conditions are met.
And while "ethers" are traded like other cryptocurrencies, they are meant to be used to pay for actions on the Ethereum network.
"You can put as many conditions as you want in the contract," said Lam, noting that institutions like banks are interested in the technology because it could cut out the middle-man in transactions.
Ripple is another cryptocurrency that individuals can buy on one of the many sites that trade cryptocurrencies, but it was built to allow banks to send international payments across networks. The system looks to reduce costs and increase the speed for global payment services.
Meanwhile, Monero is meant to be a secure, private and untraceable currency. It uses a system that allows users to send and receive funds without their transactions being publicly visible on the blockchain.
"It uses a different kind of technology to make not only transactions private, but also these transactions untraceable," said Lam, explaining that bitcoin transactions can be seen.
Adham says cryptocurrencies have evolved since bitcoin first launched in 2009.
"Right now we can see a lot of payments are occurring on these digital currency networks," he said.
"But what is really coming next is that people are going to start to engage in contracts and start to perform more complex financial transactions than they do even in the current financial system."