There's a new Bitcoin competitor out there, and it is called Zerocoin. It probably won't be the last cryptocurrency for sure.

Zerocoin might be useful, especially to drug dealers and money launderers. Bitcoin itself, isn't actually anonymous. Every transaction is recorded and linked to an account, and details and history are all public.

Zerocoin added an extra layer of privacy to Bitcoin transactions, and will take advantage of a mathematical principle known as "zero-knowledge proof" that shows the end result of transactions without revealing the computation process it took to get there.

And then there's Litecoin - another streamlined currency second only to Bitcoin in popularity. And Mastercoin - a supposedly more secure cryptocurrency.

In fact, there's so many different cryptocurrencies around now, and it's worth wondering if the fragmentation of Bitcoin is going to destabilize the entire cryptocurrency ecosystem. Who wants to accept so many different kinds of cryptocurrency in the first place? And who will invest in them?

[Forbes]