Alternative coins rise to challenge bitcoin as the future of money

For many people, bitcoin seems like something from the day after tomorrow.

For Lawrence Blankenship, it's already a thing of the past.

A software engineer from Springfield, Missouri, Blankenship is putting his money on PeerCoin, one of the biggest of the virtual currencies that are being promoted as alternatives to bitcoin.

With mounting interest from prominent investors and growing acceptance from regulators, bitcoin - either the new gold or the next Dutch tulip craze, depending on who is being asked - is at the centre of the virtual money universe. Yet there are dozens of digital alternatives, like PeerCoin, Litecoin and anoncoin, whose backers point to advantages they say their currency has over bitcoin.

PeerCoin, according to Blankenship, is closer than bitcoin to perfect, communal money. Blankenship, 34, has arranged to accept PeerCoin as the virtual currency of choice at a Star Trek convention he is organising in his hometown.

"Looking down the road 10 years from now, I definitely see bitcoin being ousted," he said.

In the alternative galaxy of virtual currencies, newly created money can become worth millions of real dollars in a few months. All the PeerCoin in existence, for example, was worth nearly US$40 million last week. Programmers and mathematicians release new entrants into the field almost every week. On one popular exchange, Cryptsy, 60 different coins are traded.