If you’re on the lookout for a Bitcoin alternative, then you might want to check out these three popular altcoins.
Bitcoin might dominate the market, but its competitors are increasing in popularity every day. Altcoins were created to resolve some of the limitations of Bitcoin, and as a result, they use different protocols and algorithms that many people prefer.
Altcoins often focus on either privacy, stability, or alternative payment methods. In this article, we will go through some of the most popular Bitcoin alternatives.
Ethereum (ETH)
Ethereum is a great Bitcoin alternative. It is an open-ended decentralised software platform that supports smart contracts and the creation of dApps. Launched by Vitalik Buterin in 2015, Ethereum runs on a blockchain and can be traded on digital currency exchanges. Ethereum is currently the second-largest cryptocurrency by market capitalisation according to CoinMarketCap.
This altcoin was not created with the sole purpose of being a payment method. It can also be used to monetise work and allows smart contracts and distributed apps to be built and run without any fraud, downtime, or participation from third parties.
All applications on the Ethereum blockchain are run on its cryptographic token, Ether. Ether is sought after by most developers looking to develop and run apps inside Ethereum. But it is now commonly in demand from investors wanting to make purchases of other digital currencies using Ether.
Both Bitcoin and Ethereum use the Proof-of-Work (PoW) algorithm to verify and add transactions onto the blockchain. However, Ethereum has a long-term goal that goes beyond PoW, and will soon make the switch over to a hybrid Proof-of-Stake (PoS) algorithm. Ethereum wants to move away from miners hashing for blocks and instead lock users’ funds into smart contracts.
Ethereum also has the potential to revolutionise the future of many industries, including healthcare, finance, and the government. It is a powerful altcoin and is a top competitor to its rival cryptocurrencies.
XRP
XRP is the token of Ripple and is continuing to gain attention from cryptocurrency fans and investors. XRP seeks to create a system of direct value transfers and offer alternative ways of transferring money globally.
XRP differs from many altcoins as it is centralised, meaning there is a central authority involved. This centralisation often causes many crypto enthusiasts to dismiss XRP. However, XRP’s transaction time is only a few seconds, whereas Bitcoin can often take up to 10 minutes to complete transactions.
Ripple is unique in the fact it does not require mining due to its consensus ledger. Because it does not require mining, it reduces the usage of computing power and therefore costs less to create and transfer. So far, XRP has seen great success from this model and remains one of the most enticing altcoins on the market.
Bitcoin Cash
Bitcoin Cash is a fork of Bitcoin and holds an important place in altcoin history due to it being one of the earliest and most successful hard forks. This hard fork took place as the result of debates and arguments between the miners and developers of the original Bitcoin chain.
Bitcoin Cash was created in August 2017 and aims to solve the issue of scaling through the use of bigger blocks. Bitcoin has a strict block size limit of one megabyte. However, Bitcoin Cash (BCH) increases this block size to eight megabytes with the idea that having larger blocks will allow for faster transaction times. This does come with the downside of creating a larger blockchain, which those that believe in Bitcoin argue will lead to mining becoming centralised.
BCH is backed by evangelist Roger Ver and mining giant Jihan Wu along with other industry leaders and experts. Ver says that Bitcoin Cash is the true Bitcoin as it is a form of P2P electronic cash, as described in the white paper. As of May 2019, Bitcoin Cash is the fourth-largest cryptocurrency by market cap and is trading at $286.
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.