Bitcoin alternatives: 11 cryptocurrencies you should know are cryptocurrencies that have managed to attract most attention and are the most popular aside from Bitcoin. While it’s safe to assume that most people that have Internet access have heard about Bitcoin, there are many other cryptocurrencies that are just as good and, in some cases, are more innovative. There are over 1000 cryptocurrencies aside from Bitcoin and they are commonly referred to as altcoins (alternative coins). However, while the technology that makes cryptocurrencies possible and the popularity of Bitcoin spurred the development of this big number of altcoins, only a handful deserve a closer look and we have selected 11 Bitcoin alternatives that have the largest total value and are popular enough to deserve our attention.
But why are Bitcoin alternatives important? On the one hand, some people in the cryptocurrency community argue that Bitcoin should be the only cryptocurrency, because it’s the oldest and because it put the basis of all other cryptocurrencies. Moreover, as Bitcoin continues its price growth (it has recently passed the $9,000 mark), it’s clear that Bitcoin is far more popular than other cryptocurrencies and therefore enjoys a very strong network effect. Businesses that adopted cryptocurrency as a method of payment mostly included only Bitcoin, as you can see by looking at these 25 big companies that accept Bitcoin, Ethereum and other cryptocurrencies, and so far are not so keen to accept other cryptocurrencies.
Bitcoin’s value is also secured by its scarcity as there will be only 21 million Bitcoins ever mined. Scarcity is what sets Bitcoin apart from fiat currencies and is one of its main features. Other cryptocurrencies also have scarcity preset in their protocols, but they pale on the popularity front and are unlikely to catch up.
However, the cryptocurrency industry represents an ecosystem and competition in an ecosystem is a very healthy thing. Cryptocurrencies are decentralized, so there’s no single entity that makes all decisions and they heavily rely on their networks. They work as long as there is consensus among all members of the network and any changes have to be accepted by every single peer in the network. Because of Bitcoin’s value, which currently stands at $150.54 billion, members of the network are reluctant to implement changes. In the last couple of months, Bitcoin went through two hard forks, when disagreements emerged within the network and it was split into separate incompatible networks and created two other cryptocurrencies: Bitcoin Cash and Bitcoin Gold.
On the other hand, new altcoins are much more flexible and more innovative. Some altcoins are very similar to Bitcoin and can adopt some minor changes that the developers think Bitcoin lacks. Take for example Litecoin, which is a lot like Bitcoin, but have a bigger supply of 84 million coins and require the quarter of the time to mine a block compared to Bitcoin (2.5 minutes vs 10 minutes). Other cryptocurrencies like Zcash and Monero provide more privacy, while Ethereum represents a blockchain-based platform that can run smart contracts and has its own cryptocurrency called Ether, so its completely different from Bitcoin. In this way, Bitcoin alternatives provide different features that users can choose based on their priorities.
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Bitcoin alternatives also play a major role in attracting newcomers to the cryptocurrency community. With Bitcoin so expensive, new players might be reluctant to commit large amounts of capital to a currency, whose value growth can be uncertain due to the spectacular appreciation it has already registered. On the other hand, altcoins, which are usually listed through Initial Coin Offerings, can attract new investors that see potential in new projects. Moreover, altcoins offer cryptocurrency investors the opportunity to diversify and, therefore, mitigate their risk.
With this in mind, let’s take a look at 11 Bitcoin alternatives that everybody interested in cryptocurrencies should know about.
Zcash is a cryptocurrency that was launched by the Zerocoin project and has surged by over 140-fold in the last 12 months. Zcash currently has a total capitalization of $915.20 million, based on some 2.71 million coins in circulation valued at $337 apiece. However, when it was first launched in October 2016, people were paying $1,000 per unit. Zcash was developed as a Bitcoin alternative that has more anonymity and it can be sent around the world without leaving a single trace, unlike Bitcoin.
Next in our list of Bitcoin Alternatives: 11 Cryptocurrencies You Should Know is EOS. EOS conducted its Initial Coin Offering in July 2017 and managed to raise $185 million, which makes it one of the 7 biggest ICOs ranked by amount raised. EOS currently has a total market capitalization of $1.39 billion. Block.one, which develops EOS, aimed to create a blockchain network similar to Ethereum, which can be used to automate processes, develop applications and which offers multi-directional scaling of decentralized applications. EOS managed to attract a lot of attention before the ICO, with major outlets like Reuters and the New York Times writing about it. The hype resulted in EOS’ price going past $5 right after the ICO, although it currently hovers around the $2.50 mark.
Singapore-based Qtum Foundation aimed to build Qtum as a combination of Bitcoin and Ethereum blockchains. Qtum represents a platform for smart contracts that can be used by businesses for automating supply chain management and transactions. The project was backed by many major companies that aside from financial support provided their networks to help accelerate the development of technology and infrastructure around Qtum. Qtum currently has a market cap of $1.08 billion.
NEM is another one of cryptocurrencies you should know. It was launched in 2015 and is written in Java. The peer-to-peer cryptocurrency and blockchain platform that introduced new features to blockchain technology, such as proof-of-importance algorithm (instead of proof-of-work used by most cryptocurrencies), multisignature accounts, encrypted messaging and a reputation system based on EigenTrust algorithm. NEM is currently valued at $0.22 per token and has a total market capitalization of $1.97 billion.
IOTA is a cryptocurrency developed to provide secure communication and payments between Internet of Things devices. The distributed-ledger technology behind IOTA uses directed acyclic graph instead of blockchain, which results in free transactions, fast confirmation times and unlimited number of transactions that can happen simultaneously. IOTA has a total market capitalization of $2.68 billion.
NEO is one of the largest Bitcoin alternatives based on its market capitalization that amounts to $2.55 billion. NEO is the first decentralized, open-source blockchain platform and cryptocurrency in China. It is similar to Ethereum in a way that it allows to run smart contracts and the NEO smart contract platform allows using any mainstream programming language, as compared to Ethereum, which requires developers to learn Solidity, the language used to code for Ethereum Virtual Machine.
Another one of the cryptocurrencies you should know is Monero, which currently has a total value of $2.56 billion. Monero was introduced in 2014 and i focuses on privacy. While it still uses a public ledger to record transactions, similar to Bitcoin and other cryptocurrencies, it obscures the sender, recipient and amount transferred through ring signatures, stealth addresses and RingCT technology, although the privacy option can be disabled.
Dash (portmanteau for Digital Cash) is the name of the cryptocurrency that was known as Darkcoin until 2015 and XCoin before then. It was originally released in 2014 and it aims to be more user-friendly than Bitcoin. In addition to traditional Bitcoin features, where miners are required to approve transactions, Dash also offers instant and private transactions, which are performed by “masternodes”. Dash has a total market capitalization of $4,84 billion and there are 7.71 million coins in circulation, which represent around 40% of the total supply.
Next in line among cryptocurrencies you should know is Ripple (also known as XRP), which is the native cryptocurrency of the real-time gross settlement system, currency exchange and remittance network with the same name. Ripple was released in 2012 and has a market capitalization of $9.73 billion. It is based around a shared public ledger and it aims to allow secure, instant and nearly free global financial transactions. Ripple has been adopted by several big banks, including UniCredit, UBS and Santander.
Litecoin was released in 2011 by Charlie Lee, a former Google employee. It represents a form of the Bitcoin Core client, so its very similar to Bitcoin, but it has a much shorter block generation time of 2.5 minutes and provides a larger number of coins (84 million). It also uses scrypt as hashing algorithm instead of SHA-256 used by Bitcoin. Litecoin’s total capitalization currently amounts to $4.84 billion and there are 54.02 million coins in circulation.
Then there’s Ethereum, which is the most popular cryptocurrency and blockchain platform besides Bitcoin. Ethereum is a platform that provides smart contract functionality through the Ethereum Virtual Machine. The platform has its native currency called Ether, which has a total capitalization of $45.52 billion and the amount of Ether is not limited, but only 18 million tokens can be released each year. Ethereum is also supported by many big corporations including JPMorgan Chase & Co., Inc. (NYSE:JPM), Microsoft Corporation (NASDAQ:MSFT), and Intel Corporation (NASDAQ:INTC), which are members of the Enterprise Ethereum Alliance, which aims to develop software on the Ethereum platform to facilitate smart contracts.
Thus concludes the list of Bitcoin alternatives: 11 cryptocurrencies you should know. Many of the Bitcoin alternatives in the list are still new and their future is uncertain, but some, such as Ethereum, Litecoin, Monero, have proven themselves and look like they are here to stay.