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.