With the cap of $10 billion, bitcoin has been the central nerve of digital currencies for years. According to some recent statistics, its prices reached a record-breaking high of $4500 in August. However, as bitcoin has gained momentum, numerous similar cryptocurrencies have entered the market.
Moreover, the majority of these altcoins offer numerous advantages over bitcoin, giving this market a nudge in a completely different direction. For instance, they provide us with software development opportunities, social media platforms and numerous other options powered by the blockchain.
Here are a few bitcoin alternatives that might become powerful players in such a turbulent cryptocurrency ecosystem.
With over 30% of the market share, Ethereum has become the second largest player in the digital currency landscape. Similarly to bitcoin, it’s a decentralized payment network that has its own currency. It is based on smart contracts, applications that run exactly as programmed without the interference of a third party, censorship or fraud.
Ethereum is most commonly used by developers to pay transaction fees. However, in order to understand how this process actually works, you need to know what the Ethereum Virtual Machine is.
Namely, Ethereum is not based on centralized computing. So, instead of running on one server, Ethereum is kept running by a myriad of individual computers all over the world. This means that any developer can pay in ether to run their code on, which makes the development of blockchain apps much simpler. Namely, instead of developing a new blockchain for every new application, this practice allows the creation of thousands of decentralized apps at once.
Given its potential to change the world of digital currencies forever, the Enterprise Ethereum Alliance has united over 150 banks, tech giants and other prominent companies to support the development of this cryptocurrency.
With a market cap of $220 million dollars, Ripple is the world’s third largest digital currency and real-time gross settlement system. It was created in 2012, with financial institutions like banks, payment providers and digital asset exchanges in mind. It enables them to transfer funds between numerous existing currencies almost instantly. You can even convert bitcoin to ripple and vice-versa.
Namely, unlike bitcoin and ether that are limited to 7 transactions per second, Ripple can process over 1000 transactions. This is exactly what makes it one of the most famous cross-border payment platforms. Given the simplicity of making transactions, the number of banks using XRP is on a steady rise. Namely, a consortium of 47 Japanese banks has implemented Ripple’s blockchain technology to make real-time domestic and international transactions at significantly lower costs.
Formerly known as Darkcoin or X Coin, DASH today stands for “Digital Cash.” It represents one of the largest and fastest growing open-source, peer-to-peer cryptocurrencies. Most importantly, its decentralized governance and self-funding system have made DASH the first decentralized autonomous organization. What sets it apart is a wide range of features, including InstantSend (instant transactions), PrivateSend (private transactions) and DGBB (decentralized governance) that simplify the way we trade cryptocurrencies.
It’s Masternodes that play the fundamental role in DASH. They represent a layer that is responsible for collecting and executing several transactions at once. The best aspect of such a decentralized masternode network is that it doesn’t depend on certain individuals, meaning that any user can buy DASH, make transactions and join or leave the network whenever they want.
Established in 2011, Litecoin is one of the oldest alternative digital currencies and the world’s fourth largest digital currency. Similarly to bitcoin, there is no central authority, which means that coins are created through solving algorithms. Of course, over time, these algorithms become more difficult to solve. What differentiates litecoin from bitcoin is the fact that its overall cap limit is set at 84 million, while bitcoin’s is 21 million. Most importantly, litecoin blocks are created every 2.5 minutes, compared to bitcoin’s 10 minutes, meaning that it offers faster transactions.
As it is 10 times larger than its closest competitor, Bitcoin still has a huge lead over its competition. However, as they’re gaining in popularity, the above mentioned alternative digital payment systems might steal its crown in the years to come. Given the fact that they are still low-valued and that they much greater chances of growth, it’s always a good idea investing in them.