Bitcoin is currently the most famous cryptocurrency around. But other cryptocurrencies such as Ripple, Litecoin, Ethereum, Dash, Monero, Zcash, and even stable coins like USD Coin exist. What makes them special? Why should you choose one over another? Should you even invest in cryptocurrencies? Are they safe? Which ones are worth investing in?
There are several options out there if you want to invest in Bitcoins without necessarily mining them yourself. Below are some of the best alternatives to Bitcoin, and we will get to discuss if they are really worth it.
Best Bitcoin Alternatives
1. Litecoins
Litecoins are a peer-to-peer network that operates on an open blockchain system. This means it doesn’t have any centralized authority or central bank. The network runs on the Proof of Work consensus algorithm. It was created by Charles Lee to provide people with a better alternative to Bitcoin and also to be more practical for sending funds because of its smaller transaction size.
2. Ripple
Ripple is a decentralized payment protocol and digital asset used mainly within financial institutions for cross-border payments. Its native currency – XRP – is not controlled by anyone. Instead, Ripple is managed through an independent foundation (Ripple Labs). Currently, Ripple has partnered with companies such as MoneyGram, SBI Remit, IDT Corporation, American Express, Western Union, UBS, Santander Bank and Citigroup for cross border transactions.
3. Stellar Lumens
Stellar Lumens (XLM) are the native currency of the Stellar Network. Like Ripple, Stellar uses a decentralized open-source protocol. Unlike Ripple, however, Stellar offers fast transfer speeds and low fees. Also unlike Ripple, Stellar does not require trust from third parties such as banks.
4. EOS
EOS is a smart contract platform based on blockchain technology. It enables developers to create their decentralized applications. Transactions can be made in fractions of seconds and all data is stored safely under “blocks”.
5. Factom
Factom is a distributed ledger technology that is designed to provide immutability. It stores information online in a way where it can verify authenticity and integrity. Factom is often compared to Bitcoin due to both using cryptographic signatures, therefore making it extremely difficult to alter the past.
6. Waves
Waves is a public Blockchain platform that allows users to build and deploy DApps (Decentralized Apps), ICOs (Initial Coin Offerings) and perform fundraising events. Waves provides a wallet program compatible with Windows, Linux and Mac OS platforms.
7. Bytecoin
Bytecoin is a peer-to-peer Cryptocurrency that uses a proof-of-stake consensus mechanism. ByteCoin is ASIC resistant, which means it is secure against ASIC mining. ByteCoin is available in two types: BCN and ByteBall. ByteBall is a game similar to Bitcoin Ball.
8. Golem
Golem is a Decentralized Marketplace for computing power. With Golem, individuals can rent out their excess computational resources to get paid. You don’t need to set up your servers, but instead pay someone else to host the server for you while you use your computer/laptop(s) to process tasks.
9. Storj
Storj is a cloud storage service provider. After registering, customers receive a free 100GB file storage account. They work like Dropbox; only they offer a much higher level of security since there is no single point of failure. Since it’s a decentralized network, files are split up across many computers so if one goes down, then there is minimal impact on overall performance.
10. Ethereum Classic
Ethereum Classic is an open-source software project featuring a fully decentralized version of the original bitcoin protocol. This means that the Ethereum client does not rely on any central party and all users participate in block production and validation via a peer-to-peer agreement scheme.
11. Zcash
Zcash is another cryptocurrency that aims to solve the double spending problem by leveraging zero-knowledge proofs and secret splitting. Keeping transactions confidential makes it very hard for malicious actors to tamper with them. Another feature of this currency system is the use of shielded addresses. By default, all transactions are published on the blockchain, but advanced users can have their transactions visible on a private view key.
12. NEM
NEM stands for New Economy Movement. The project started as a small community before transitioning into what we know today. Nem is a blockchain-based operating system. One of its main features is the ability to digitize assets and prove ownership without middlemen or trusted systems. Assets are secured by crypto tokens and transactions.
13. LOOM
LOOM is an acronym for “Layers Of Money” – a multi-layered cryptocurrency designed around the ideas of trustlessness and decentralization through a layered structure. It allows instant payments to be sent directly between dapps within the same ecosystem, without the need for costly intermediaries.
14. EOS
Blockchain-based smart contracts will disrupt the global $1 trillion gaming market currently controlled by 10 centralized companies including Sony, Nintendo, Microsoft, Tencent, and Alibaba among others. Some believe the U.S. digital security market is also ripe for disruption. The technology was developed by Dan Larimer who is the founder of Block.one, a company designing products for the next generation Blockchain Internet.
Are Bitcoin Alternatives Worth It?
Bitcoin has been called a bubble by some and a revolution by others. Like most innovations, it has both supporters and naysayers. Many people will tell you how great cryptocurrencies such as Litecoin are. Others will try to sell you Altcoins (alternative coins) like Dash, Ripple, IOTA, or Byteball.
Still others will claim Bitcoin’s dominance is near death because other currencies such as Ethereum, Cardano, Tron, Waves, or neo are better and more powerful!
Cryptocurrencies are quite complex and difficult to understand. But understanding the differences between Bitcoin alternatives and how each projects works is an important factor for making an educated decision.
How Does Bitcoin Compare To Other Cryptocurrencies?
Bitcoin is still the leading cryptocurrency when it comes to market cap. However, many altcoins offer lower fees, faster transaction times, and are often less expensive than using Bitcoin. Most of these alternative coins are very similar to Bitcoin so they share a lot of similarities when compared side by side.
Each coin offers something unique though. For example, Litecoin is considered silver to Bitcoin’s gold while Dash is seen as the cash of cryptocurrencies. In general, altcoins tend to be riskier since there is no regulatory oversight or government control. Investors should do their research before choosing one out of hundreds of different coins available.
Why is Bitcoin Still the Most Important Cryptocurrency?
The question isn’t if Bitcoin is going down in price but rather why it continues to rise in value and popularity so quickly. People have always wanted a form of money that cannot be manipulated by banks, governments, or any single group.
What makes Bitcoin superior to all other forms of currency is that it doesn’t require a third party to operate. Once created, bitcoins can be transferred from user to user around the world with little cost or delay. Bitcoin miners verify transactions, keep track of balances, create new blocks, and release new units of currency.
This process is decentralized and highly secure, which is why most people continue to adopt this type of currency. When you own a piece of the network, you become part of a vast ecosystem and contribute to its success. No central authority controls the creation, distribution, use, or management of bitcoins. This gives the system a degree of independence not found in traditional currencies.
Conclusion
While blockchain technology is still in its infancy, we know cryptocurrencies will play an increasingly profound role in our economy. We don’t yet fully grasp what impact it will have on our lives and businesses. However, it’s clear that it’s here to stay. As the industry evolves, we’ll see new players enter the space. New coins will emerge and existing ones will likely merge. Whatever happens, it’s safe to say that we’re living in exciting times.
