Bitcoin has been a leader in cryptocurrency innovation, bringing about a new wave of cryptocurrencies based on a decentralized peer network. It has also become the standard for cryptocurrencies and has inspired a growing number of spinoffs.
Cryptocurrency
A cryptocurrency is a digital token or “coin” that exists on a distributed ledger called a Blockchain. The field of cryptocurrency has grown tremendously since Bitcoin’s launch over a decade ago. Tomorrow may see the release of the next great digital token.
- Bitcoin is still the most popular cryptocurrency in terms of market capitalization, userbase, and popularity.
- Other virtual currencies, such as Ethereum, are being used for decentralized financial (DeFi), systems.
- Some altcoins are being promoted as having more advanced features than Bitcoin. For example, they can handle more transactions per second and use different consensus algorithms such as proof of stake.
What are Cryptocurrencies?
Let’s take a look at some of these alternatives for Bitcoin before we get into detail. A cryptocurrency is a digital currency that can be used to make tokens or coins. However, some cryptocurrencies have made it into the real world using credit cards and other financial instruments. The vast majority of cryptocurrencies are still intangible.
Cryptography is complex cryptography that allows the creation and processing digital currencies as well as their transactions across decentralized systems. This important “crypto” feature is also present in these currencies. Typically, cryptocurrencies are developed as code by teams that create mechanisms for issuance (often through a process called mining, but not always) and other controls.
Although cryptocurrencies are almost always free from government manipulation and control, this fundamental aspect of the industry has been under fire. Altcoins and sometimes shitcoins are collectively known as cryptocurrencies that are modeled after Bitcoin. They often try to present themselves in the same way as Bitcoin, or better. Altcoins have yet to see the same level of security as Bitcoin’s networks, although some may have impressive features.
Below we will be looking at some of the most important digital currencies, other than Bitcoin. First, though, let me warn you that this list is not comprehensive. This is due to the fact that more than 8,000 cryptocurrency exist as of December 2021. Although many of these cryptos are not popular or have little trading volume, they enjoy a lot of support from investors and backers.
The field of cryptocurrency is constantly growing, and the next great digital token could be released tomorrow. Although Bitcoin is widely considered to be the pioneer in the field of cryptocurrency, analysts use many other approaches to evaluating tokens. Analysts often place a lot of importance on ranking coins in relation to each other in terms of market capitalization. This has been taken into consideration, but there may be other reasons why a token of digital currency should be included on the list.
Types of crypto
Cryptocurrencies can be used to make payments and transmit value (akin digital money) to a distributed network of users. This classification may be used to describe many altcoins, which are not bitcoin or ether.
There are also tokens based on blockchain technology that serve a different purpose than money. A token that is part of an initial coin offer (ICO) could represent a stake in a decentralized finance (DeFi), or blockchain project. If tokens are tied to the project’s value, they can be called security coins (securities like stocks, but not safety).
Other tokens are used for a specific purpose or function. Storj tokens allow people to share files over a decentralized network. Namecoin provides a decentralized Domain Name System service for Internet addresses. These are also known as utility tokens.
While crypto users are able to appreciate and understand the differences today, traders and lay investors may not be able to notice them as all tokens trade in the same way on crypto-exchanges.
Ethereum (ETH)
Ethereum, the first Bitcoin alternative, is a decentralized platform that allows smart contracts and decentralized apps (dApps), to be built and run without downtime, fraud or control from a third party. Ethereum’s goal is to create a global decentralized suite of financial products that can be accessed by anyone, regardless of their nationality, ethnicity, faith, or nationality. This makes the implications for people living in certain countries more compelling. Those without state infrastructure or state identifications can access bank accounts, loans and insurance, among other financial products.
Ethereum’s platform-specific cryptographic token, ether, is used to run applications. Ether (ETH), is a vehicle that allows you to move around on the Ethereum platform. It is used primarily by developers who want to develop and run applications within Ethereum or by investors who wish to purchase other digital currencies using Ethereum. Although Ether was launched in 2015, it is the second-largest cryptocurrency by market capitalization, after Bitcoin. However, it trails the dominant cryptocurrency by a substantial margin. ETH trades at $4,000 per ETH, just half the market cap of bitcoin.
The 2014 Ethereum presale was a huge success. This helped usher in the age ICO. According to Ethereum, it can be used “codify and decentralize, secure, trade just about everything.” In 2016, Ethereum was attacked by the decentralized autonomous organization (DAO). Ethereum (ETH) was then split into Ethereum Classic (ETC).
In December 2020, Ethereum changed its consensus algorithm from proof-of-work (PoW), to proof of stake. This change is meant to make Ethereum’s network more efficient and to improve transaction speed. It also creates a more deflationary economic climate. This helps to secure the network as well as process any transactions that occur. This is similar to an interest account, where those who do this are paid ether. PoS allows network participants “stake” their Ethereum to the network. This alternative to Bitcoin’s PoW system, where miners get rewarded with more BTCs for processing transactions.
Litecoin (LTC)
Litecoin (LTC) was launched in 2011 and was one of the first cryptocurrencies that followed in the footsteps Bitcoin. It was created in 2011 by Charlie Lee, a graduate from MIT and a former Google engineer.
Litecoin is based upon an open-source global payment system that is not controlled or regulated by any central authority. It uses Scrypt as a PoW and can be decoded using consumer-grade central processing unit (CPUs). Although Litecoin looks similar to Bitcoin in many aspects, it has a faster block creation rate and therefore a quicker transaction confirmation time.
Litecoin is accepted by a growing number merchants, other than developers. Litecoin is the 18th largest cryptocurrency worldwide, with a market capitalization in excess of $10 billion and a per token value of approximately $148 as of December 2021.
Cardano (ADA)
Cardano (ADA), a “Ouroboros proof of-stake” cryptocurrency, was created using a research-based approach. It was created by engineers, mathematicians and cryptography specialists. Charles Hoskinson was one of the original five founders of Ethereum. After some disagreements over the direction Ethereum was going, he quit and later helped to create Cardano.
Cardano’s team created its blockchain through extensive experimentation, peer-reviewed research, and extensive experimentation. More than 120 papers have been written by the researchers involved in the project on a variety of topics related to blockchain technology. This research is the foundation of Cardano.
Cardano appears to be able to stand out from its PoS peers and other large cryptocurrencies due to this rigorous process. Cardano has been called the “Ethereum Killer,” because its blockchain is capable of much more. Cardano is still very much in its early stages. Although it has beat Ethereum to the PoS consensus model it still has a lot of work ahead in terms DeFi applications.
Cardano is aiming to be the world’s financial operating system. It has DeFi products that are similar to Ethereum, as well as solutions for chain interoperability and voter fraud. Cardano, which has a market capitalization of $42 billion as of December 2021, is the sixth largest. One ADA trades for approximately $1.25.
Polkadot (DOT)
Polkadot is a PoS cryptocurrency that aims to provide interoperability between other blockchains. Its protocol connects permissioned and non-permissionless blockchains to allow systems to work together. Polkadot’s central component is its relay network, which allows interoperability between different networks. Parachains, which are parallel blockchains that use their native tokens to support specific-use cases, are also possible.
Polkadot is different from Ethereum in that developers can create their own blockchains while still using the security provided by Polkadot. Developers can create new blockchains with Ethereum but must create their own security measures. This can make it vulnerable to attacks on smaller projects. The larger the blockchain, the greater the security. This is called shared security in Polkadot.
Gavin Wood, another of the core founders and members of the Ethereum project, created Polkadot. He had divergent opinions about the future of the project. Polkadot’s market capitalization is approximately $25 billion, and one DOT trades at $25.
Bitcoin Cash (BCH)
Bitcoin Cash (BCH), one of the most important altcoins in history, is a fork of the original Bitcoin. A fork is a result of arguments and debates between developers and miners in the cryptocurrency world. Because digital currencies are decentralized, it is necessary to make wholesale changes to the code that underlies the token or coin. This consensus must be reached by all parties. The mechanism for this process varies depending on the cryptocurrency.
Sometimes, digital currencies are split when different factions don’t agree. The original chain will remain true to its code, while the new chain will begin life as a new version with any changes to its code.
BCH was created in August 2017 by one of these splits. BCH was born out of the need to scale. The Bitcoin network has a limit of one megabyte (MB) blocks. BCH increases the block size by one MB to eight megabytes. This is because larger blocks can contain more transactions and therefore the transaction speed would increase. Other changes are also made, such as the removal of Segregated Witness protocol which has an impact on block space.
BCH’s market capitalization is around $8.2 Billion and its token value is $436 as of December 2021.
Stellar (XLM)
Stellar is an open-source blockchain network that connects financial institutions to facilitate large transactions. Large transactions between banks and investment companies used to take several days and involve a lot of intermediaries. Now, they can be done almost instantly with no intermediaries and cost very little for the parties involved.
Stellar is a blockchain for institutional transactions that has been marketed as an enterprise blockchain, but it can still be used by anyone. The system allows cross-border transactions between any currency. Stellar’s native currency, Lumens (XLM), is To be able to transact through the network, users must have Lumens (XLM).
Jed McCaleb was a founding member at Ripple Labs, and the developer of the Ripple protocol. He founded Stellar. He left his position at Ripple to co-found Stellar Development Foundation. Stellar Lumens are valued at $0.26 and have a market capitalization in excess of $6 billion as of December 2021.
Dogecoin (DOGE)
Dogecoin (DOGE), considered by some to be the original “memecoin,” caused a stir when the coin’s price soared in 2021. The coin features an image of the Shiba Inu and is accepted by major companies such as the Dallas Mavericks, Kronos and-perhaps most importantly-SpaceX, an American aerospace company owned by Elon Musk.
Two software engineers, Jackson Palmer and Billy Markus, created Dogecoin in 2013. According to reports, Palmer and Markus created the coin as a joke in response to the wild speculation surrounding cryptocurrency markets.
DOGE’s price reached an all-time high at $0.68 during the week that Musk was scheduled to appear live on “Saturday Night Live.” One DOGE is worth approximately $0.17 and is the 12th largest cryptocurrency.
SHIB
A memecoin inspired from a memecoin, Shiba Inu, (SHIB) rose to prominence in 2021 and briefly surpassed the market capitalization for Dogecoin.
Binance Coin (BNB)
Binance Coin (BNB), a utility cryptocurrency, is used to pay fees for trading on Binance Exchange. It is the third largest cryptocurrency in terms of market capitalization. Trades can be discounted for those who use the token to pay for the exchange.
Binance Coin’s blockchain also serves as the platform on which Binance’s decentralized exchange runs. Changpeng Zhao founded Binance Exchange. It is one of the most popular exchanges based on trading volume.
Binance Coin started out as an ERC-20 token, but it was later able to operate on the Ethereum blockchain. It was eventually able to launch its own mainnet. The network uses a PoS consensus system. Binance Coin’s market capitalization is $91.5 billion as of November 2021. One BNB has a value $545.
Tether (USDT)
Tether (USDT) was one of the first and most popular of a group of so-called stablecoins-cryptocurrencies that aim to peg their market value to a currency or other external reference point to reduce volatility. Tether and other stablecoins aim to smoothen out price fluctuations in order to attract people who might otherwise be cautious. Tether’s value is directly tied to the U.S. Dollar. Users can make faster transfers from other cryptocurrencies to U.S. Dollars than actually converting to regular currency.
Tether was launched in 2014 and describes itself as “a Blockchain-enabled Platform…to make fiat currency digitally easier to use.”
Tether, which has a market capitalization of $73.4 billion, is the fourth-largest cryptocurrency. It also has a per-token price of (you guessed!) $1. $1.
Monero (XMR)
Monero (XMR), a secure, private and untraceable cryptocurrency, is now available. This open-source cryptocurrency gained a lot of interest from the cryptography community and enthusiasts in April 2014. This cryptocurrency was developed entirely by donations and is community-driven.
Monero was launched with a strong focus in decentralization, scalability, as well as complete privacy. It uses a special technique called “ringsignatures” to ensure that all valid signatures are visible.
Monero’s exceptional security measures have earned it an unsavory reputation. It has been linked to criminal activities around the globe. Monero is a great tool for anonymous criminal transactions, but it also provides privacy that is beneficial to dissidents from oppressive regimes around world.
Monero’s market capitalization is $3.2 billion, and its per-token value is $181 as of December 2021.