As we all know, Bitcoin is the first-ever cryptocurrency that changed the world of crypto in the ways we can’t imagine. For someone who has very little knowledge in this space still believes that the Bitcoin is a synonym of cryptocurrency; however, that is entirely wrong. Even though Bitcoin dominates 63% of the entire crypto market, thousands of other lesser-known cryptos are still prevailing. As of March 2020, there are close to 5,200 different cryptos in the market other than Bitcoin.
In this article, let’s discuss some of the important cryptos other than Bitcoin. These cryptos, necessarily, are alternative to Bitcoins; hence they are known as altcoins. Any crypto that doesn’t belong to the Bitcoin family can be considered an altcoin. Most of the altcoins will have their own blockchain in which the respective transactions are recorded. Now let’s explore the purpose of altcoins and some of the top contenders of Bitcoin in the upcoming sections.
Purpose of Altcoins
Without any doubt, the Bitcoin network and the software that operates behind it is incredible. That is the reason why Bitcoin is still leading the crypto market. However, there are some serious considerations that can be potentially improved with the technology we have today. For instance, Bitcoin uses Proof of Work as a consensus algorithm. It works well but consumes a lot of electricity which is not eco-friendly. Also, in the Bitcoin network, new coins are formed every 10 minutes. More coins can be produced if more efficient methods are used.
These changes can be made to the original Bitcoin network also. But it is not advisable because there are hundreds if not thousands of businesses that rely on this crypto. The software changes can affect the operations of those businesses. Therefore, the need for new cryptos that have the potential to solve these problems has aroused. One more important reason why alternative coins are needed is to diversify crypto usage. The only intention behind the creation of Bitcoin is to use it as an alternative stream of currency. But each of the altcoins can be used for different purposes as they are not just confined to be a digital money.
Some of the Notable Altcoins
There are around 50 altcoins that are brilliantly designed and have the potential to compete with Bitcoin. Some of them have been discussed below.
This cryptocurrency is an early Bitcoin spinoff which has been launched in late 2011. Litecoin has changed many rules of Bitcoin to cater to a different segment of people. This crypto is different from Bitcoin in numerous ways.
For instance, mining of Litecoin is way too easier than that of Bitcoin. To mine Bitcoins, miners have to use sophisticated tools like ASIC computers. It is hard for common people to afford such equipment. To mine Litecoin, a typical CPU is sufficient. The idea is to be unbiased and give everyone an opportunity than just the rich ones.
This crypto was launched in 2015 by a Russian-Canadian computer programmer Vitalik Buterin. Ethereum is one of our favorite altcoins because of various reasons. Unlike Bitcoin, Ethereum is a blockchain platform that enables other companies to build their cryptos using their blockchain. Ether is the native coin of this network, and it is used to pay for the services offered by Ethereum.
Also, the Ethereum network gave birth to an amazing invention known as ‘Smart Contracts.’ The smart contracts enable the performance of credible transactions without the involvement of any third parties. The transactions that are done through smart contracts are irreversible and trackable. Many of the market experts believe that this technology alone can replace lawyers one day. If not for altcoins, we wouldn’t see any of these fantastic features in the crypto space.
One of the fundamental properties of any cryptocurrency is to allow users to make anonymous transactions. However, while transacting Bitcoins, our identity is semi-anonymous. This is because our identity is linked to our Bitcoin addresses. But Monero is one such altcoin that offers complete anonymity for its users. This is done by masking the user addresses by using cutting edge technology like Ring Signatures, Stealth Addresses, and Ring Confidential Transactions.
Please do your research to learn more about the working of this technology. If we had stuck to Bitcoin alone, we would never have had crypto where we can transact with 100% anonymity. There’s a dark side to this as well. Due to the anonymity feature, this crypto is widely used in the dark web as the transactions made can never be traced.
Choosing a Credible Altcoin
We should be cautious while investing in a random altcoin. There have been thousands of scams in the crypto space where the primary intention of the coin founder is to make a profit and exit the market. One of the major red flags of a crypto scam company is the unusual hype created by the founders on some of the popular crypto forums. Typically, these coins will be launched in a very short notice.
The value of the coins will also be driven up by making false promises. These scam companies spend a fortune on marketing alone to make a fortune later. Hence it is always recommended to fact check the claims made by these companies. Also, one crucial thing is to do a thorough background check of the founders and the team before making any investment decisions.
We hope you find this article informative. If you have any questions, let us know in the comments below. All the best.