Bitcoin, the first and most well-known cryptocurrency, has been around since 2009. Since the creation of Bitcoin, the market for alternative digital currencies has grown significantly. While it remains the most well-known and widely-used cryptocurrency, as the industry has evolved, several alternative digital currencies, often referred to as altcoins, have emerged.
These alternative cryptocurrencies offer various features and benefits that differentiate them from Bitcoin. In this essay, we will discuss and delve deeper into the top ten Bitcoin alternatives
What are Altcoins?
Altcoins, short for alternative coins, are any digital currency other than Bitcoin.
They are alternative digital currencies that have come up after the success of Bitcoin, with the goal of offering different features and benefits.
Altcoins are based on the same decentralized, peer-to-peer technology as Bitcoin, but they use different algorithms, consensus mechanisms, and transaction validation methods.
These alternative digital currencies offer a range of options for those looking to diversify their portfolio or use cryptocurrency in a specific way.
What are the top ten alternatives to Bitcoin?
In 2023, the following altcoins are the top ten alternatives to Bitcoin.
- Binance Coin (BNB)
- Cardano (ADA)
- Dogecoin (DOGE)
- Polygon (MATIC)
- Avalanche (AVAX)
- Ripple (XRP)
- Chainlink (LINK)
- Monero (XMR)
- Tether (USDT)
Ethereum (ETH)
The launch of Ether (ETH) took place in 2015, and as of now, it stands as the second-largest cryptocurrency in terms of market cap. ETH is the native currency of Ethereum.
Ethereum often referred to as the “world computer,” is a decentralized platform that enables the creation of smart contracts and decentralized applications (dApps).
It uses its own cryptocurrency, Ether, as a means of payment for transactions within the network. Ethereum’s smart contract functionality allows for the creation of complex financial instruments. For example Decentralized Finance (DeFi) applications.
Additionally, Ethereum’s open-source nature allows for a large developer community to contribute to its development, making it more adaptable to changes in the market.
You can buy ETH on Binance, Coinbase Pro, OKEx, Kraken, Huobi Global, etc
Binance Coin (BNB)
Binance Coin is the native cryptocurrency of the Binance exchange. Changpeng Zhao is the founder of Binance Exchange, which in today’s time is one of the largest cryptocurrency exchanges in the world.
Binance Coin initially worked on the Ethereum blockchain and was an ERC-20 token. Later it had its own mainnet launch and uses the security of Tendermint byzantine-fault-tolerant (BFT) consensus mechanism. BNB can come in use to pay for trading fees on the Binance exchange, and holders of the coin receive discounts on trading fees. It can also help to participate in token sales on the Binance Launchpad platform.
The current ranking of Binance Coin on CoinMarketCap is number 4 and it has a total supply of 200,000,000 BNB coins. Binance holds every quarter the burning of the BNB supply. The main objective of the burn is to reduce the total supply by half — or 100,000,000 BNB. You can get Binance Coin in the following ways
- Transfer from Crypto Exchanges
- Buy from Wallets
- Buy with Binance Connect
Cardano (ADA)
The native ADA token of Cardano takes its name from the mathematician Ada Lovelace. Ada Lovelace is popular for her work on the mechanical general-purpose computer. The ADA token works towards ensuring that owners can participate in network operations. As a result, those who hold the cryptocurrency have certain governance rights to vote on any proposed changes to the software.
Cardano is a decentralized platform that focuses on security and sustainability. It uses a unique consensus algorithm, called Ouroboros, which is a lot more energy-efficient than other algorithms. Cardano also has a two-layer architecture, with a separate layer for smart contracts and a separate layer for the settlement of transactions. This allows for more flexibility and scalability in the network. Additionally, Cardano has a strong focus on governance and community involvement, with a decentralized decision-making process for future developments.
You can get ADA on exchanges like Binance, Bittrex, eToro, Coinbase, etc.
Dogecoin (DOGE)
Dogecoin (DOGE) is a cryptocurrency that was created in 2013 as a lighthearted and fun alternative to other digital currencies. Billy Markus and Jackson Palmer are the two software engineers responsible for the creation of DOGE. It was originally based on a popular internet meme featuring a Shiba Inu dog and the phrase “Such Wow.” Despite its origins as a joke, Dogecoin has grown in popularity and has become a legitimate cryptocurrency with its own community of users and supporters.
Dogecoin uses a proof-of-work consensus mechanism, similar to Bitcoin, and has a fast block time of one minute. This allows for faster transaction speeds and lower fees compared to Bitcoin. Additionally, Dogecoin has a large supply of coins, with a maximum supply of 129 billion DOGE. This is much larger than the maximum supply of 21 million for Bitcoin.
Polygon (MATIC)
Polygon (MATIC) is a multi-chain scaling solution for the Ethereum blockchain. It is a decentralized, open-source protocol that aims to solve the scalability and high gas fees issues facing the network. The protocol uses a technique called “layer 2 scaling,” which allows for the processing of transactions off-chain, resulting in faster and cheaper transactions. It has received support from renowned industry names including Binance and Coinbase.
It has a native token, called MATIC, which is an ERC-20 token running on the Ethereum blockchain. MATIC can be used to pay transaction fees and can be staked to participate in the network’s consensus mechanism. The token also serves as a governance token, allowing holders to vote on network upgrades and developments.
One of the key features of Polygon is its use of a Proof of Stake (PoS) Chain combined with the Plasma Framework. This allows for a more energy-efficient and decentralized network compared to the proof-of-work consensus mechanism used by Ethereum. Additionally, the protocol has implemented a number of upgrades to the Ethereum Virtual Machine (EVM), which further improves the scalability and security of the network. Polygon also helps in the deployment of decentralized applications (dApps) and blockchain projects.
Avalanche (AVAX)
Avalanche (AVAX) is a decentralized finance (DeFi) and multi-chain ecosystem. It is a platform that allows for the creation and execution of decentralized applications (dApps) and smart contracts across multiple blockchains.
Avalanche uses a unique consensus mechanism which allows for the creation of multiple independent subnets, called “virtual chains,” within the Avalanche network. Each virtual chain can have its own set of rules, governance, and consensus mechanism, making it possible to create customized blockchains for different use cases.
Avalanche can settle around 4,500 transactions per second and it aims to be even faster, more versatile, secure, affordable, and accessible. Avalanche also has its own native token, AVAX. 720 million tokens are the set amount for the maximum supply of AVAX. Avalanche users are responsible for controlling the rate at which new coins are minted
Ripple (XRP)
Ripple is a digital currency that works with the goal of facilitating cross-border payments. According to the website “In 2012 David Schwartz, Jed McCaleb, and Arthur Britto launched the XRP Ledger, with its native currency XRP”
Unlike Bitcoin and Ethereum, Ripple’s consensus algorithm does not rely on a decentralized network of users. Instead, Ripple uses a network of trusted nodes to validate transactions, making it faster and more efficient than Bitcoin. Ripple’s native cryptocurrency, XRP, is primarily in use as a bridge currency in cross-border payments and has partnerships with several major financial institutions. Key features of the platform include low cost, speed of settling transactions in 3-5 seconds, scalability of around 1,500 transactions per second and carbon neutrality. Ripple is not just an open-source protocol but is also truly permissionless which makes it a great choice today.
Chainlink (LINK)
Chainlink is a decentralized oracle network that connects smart contracts to external data sources. This allows for the integration of real-world data, such as stock prices or weather data, into smart contracts. The security of Chainlink’s oracles is through a decentralized network of nodes, making the data tamper-proof. This opens up new possibilities for the use of smart contracts in various industries, such as finance and insurance. The LINK token is used to pay for access to this data and other services on the Chainlink network. The price of the token fluctuates based on supply and demand in the open market.
Operating on the Ethereum platform, Chainlink uses the proof-of-stake consensus mechanism. Additionally, Chainlink is also an open-source blockchain project. This helps in allowing anyone to view the project’s code and contribute. According to Investopedia, “LINK cryptocurrency is used to incentivize Chainlink node operators rather than being designed for everyday purchases. These network participants, tasked with securely transferring data to and from blockchains, are paid in LINK.”
Monero (XMR)
Monero (XMR) is the native token of the Monero blockchain, a privacy-focused cryptocurrency. The token is used as a means of exchange within the Monero network and can be used to pay for goods and services, similar to other cryptocurrencies. However, Monero’s unique features make it stand out from other digital currencies. The creation of Monero (XMR) took place in 2014. Monero uses a unique technology which allows for anonymity and security in transactions.
Monero’s blockchain is also resistant to analysis, making it difficult for third parties to trace transactions. It also makes it a suitable option for individuals and organizations that operate in countries with strict government regulations or censorship.
One of the key features of Monero is its use of “mining,” which is the process of creating new coins. Monero uses a Proof of Work (PoW) consensus mechanism which makes the Monero network more decentralized and resistant to centralization by large mining pools.
Tether (USDT)
Tether (USDT) is a stablecoin. A stablecoin is a type of cryptocurrency that is pegged to the value of a fiat currency. In this case, it is the US dollar. The main purpose of Tether is to minimize the volatility of other cryptocurrencies. This makes it more suitable for use in everyday transactions. USDT is often in use as a “bridge” currency for trading other cryptocurrencies, as it allows traders to move in and out of different currencies without having to convert back to fiat.
USDT is issued by Tether Limited, a company that claims to hold an equivalent amount of US dollars in reserve for each USDT token issued. This makes it different from other cryptocurrencies, which can fluctuate greatly in value.
Its initial launch in July 2014 was as Real coin, a second-layer cryptocurrency that was on top of the Bitcoin blockchain using the Omni platform. Later its name became USDT and updates took place to make it work on the Ethereum, EOS, Tron, Algorand, and OMG blockchains. According to CoinMarketCap, “There is no hard-coded limit on the total supply of USDT — given the fact that it belongs to a private company, theoretically, its issuance is limited only by Tether’s own policies.”
To Summarise:
In conclusion, Bitcoin alternatives bring to the table unique aspects as compared to Bitcoin.
They all have their own unique characteristics and are applicable to different use cases. As with any investment, it is important to do your own research. It is also important to understand the potential risks before investing in any cryptocurrency. The above-mentioned crypto-currencies are some of the most popular ones today.
However, it’s always important to conduct your own analysis and make your own independent decisions in the finance world. The crypto market is highly speculative and fickle, and the value of altcoins can fluctuate greatly. It’s important to be aware of market conditions, regulatory changes, and potential risks. It is good advice to only invest what you can afford to lose.
In any case, the crypto market is a fast-evolving one, and new altcoins with innovative features are emerging constantly. As the market matures, the use cases for altcoins will continue to expand and they will play a more prominent role in the global economy.
What did we learn?
