10 Bitcoin Alternatives
As the original cryptocurrency, Bitcoin has always led the pack of digital coins. Other cryptocurrencies, however, have succeeded in improving on some of Bitcoin’s features and competing with it effectively both as usable currencies and as investments. These alternative coins are shortly called “altcoins”. Here are 10 of the top Bitcoin alternatives that everyone interested in the cryptocurrency market should know about and consider using.
Litecoin was released in 2011, making it one of the longest-standing competitors to Bitcoin. It was designed to solve some of the functional flaws of Bitcoin, specifically its long transaction times. The Litecoin blockchain adds new blocks roughly four times as often as the Bitcoin blockchain does, allowing for transactions to be confirmed much more quickly. Litecoin also improved somewhat on Bitcoin by allowing for a higher supply limit of 84 million units, as compared to Bitcoin’s limit of 21 million.
One of Bitcoin’s most significant weaknesses is the fact that the public blockchain can track all Bitcoin transactions. Monero is one of several cryptocurrencies designed to fix that problem by obscuring transaction information on its blockchain, including sender and recipient wallet addresses and transaction amounts. Monero is one of the only cryptocurrencies whose individual units are completely fungible, meaning that they cannot be individually identified and rejected based on their previous transaction history. For privacy-minded cryptocurrency users, Monero stands out as one of the better Bitcoin alternatives.
With the push to create new cryptocurrencies to improve upon Bitcoin, it’s hardly surprising that a parallel effort has also been made to fix the problems of Bitcoin itself from within. The result of this effort is Bitcoin Gold, a hard fork off of the original Bitcoin blockchain. The main difference between Bitcoin Gold and Bitcoin is the fact that Bitcoin Gold does not allow for mining on specialized hardware, such as the ASIC miners that are popular with professional Bitcoin miners. This adjustment keeps Bitcoin Gold more decentralized than its original counterpart, allowing individual users to mine it equitably and preventing professional miners from hoarding massive supplies of newly-created coins. Mining Bitcoin Gold is primarily done with computer GPUs, as was initially the case in the early days of Bitcoin.
While some Bitcoin alternatives have worked exclusively on fixing the inherent problems of the original cryptocurrency, others have innovated with the very ways in which digital coins are created and used. Steem is a currency that falls into the latter category. The concept behind Steem is a combination of cryptocurrency and social media in which users on the main Steem platform, known as Steemit, earn Steem by creating, voting for and interacting with content. The more engagement a post or other piece of material receives on Steemit, the more Steam its creator will be rewarded with. If you’re a social media expert who knows how to create engaging posts and content, using Steemit is an excellent way for you to make money in the form of cryptocurrency.
Iota is arguably one of the most innovative new cryptocurrencies on the market, in part because it deviates from almost all of its peers by not utilizing blockchain technology. Instead, Iota uses a data storage structure known as a tangle, in which transactions get entangled with one another, but still left as individual units. That contrasts with blockchains, in which operations get grouped into a single data storage unit called a block. This tangle system is also structured to create a hierarchy of user transaction speeds. Users who are more active will have transactions go through faster, which encourages frequent usage of Iota and rewards people who adopt it for regular use.
Dash is a bit like Monero in that its main advantage over Bitcoin comes in the form of enhanced privacy and security. On Dash’s blockchain, coins can be sent using a feature called PrivateSend that mixes Dash transactions over several different pools, making it impossible to track any one deal. Regarding proven security, Dash is like the top of the cryptocurrency stack. For several years, an outstanding reward of $15,000 was offered to anyone who could find a way to crack Dash’s security and track individual PrivateSend transactions. So far, no one has managed to claim that reward. As a result, Dash is a heavy favorite among cryptocurrency users who aren’t comfortable with the possibility that their transactions could get traced and linked to their real-world identities.
During the cryptocurrency bubble of late 2017, Bitcoin was far from being the highest performer as an investment. That honor went to a token technically known as XRP, but more frequently called Ripple, which increased in value by more than 36,000 percent over the course of the year. Ripple is somewhat unique in the cryptocurrency world in the sense that it may have potential applications for the traditional finance industry. By the end of 2017, large banks and financial institutions were exploring the possibility of using Ripple to send money worldwide quickly and securely. This fact has drawn many investors to Ripple as one of the more stable and potentially secure long-term cryptocurrency assets.
Zcash shares several characteristics with Monero, particularly the fully fungible nature of its coins. This cryptocurrency, however, has taken the concept of untraceable transactions a bit farther than Monero. Zcash, built around an idea from the world of cryptography known as a zero-knowledge proof, allows the peer network of Zcash to verify transactions without pertinent information about them. By extension, this capability will enable Zcash to provide full encryption for all of its operations. Although Dash may have the most proven record of anonymity in the cryptocurrency world, Zcash is an altcoin that could be just as successful on the privacy front.
NEO is a cryptocurrency whose primary value comes more from its community than from features that differentiate it from other digital coins. Regarding its features, NEO is very similar to Ether (see below). This cryptocurrency, however, has a very dedicated community of developers and promoters behind it who are continually working to improve its functionality and make widespread adoption easier. Even the structure of NEO is set up to encourage this kind of ongoing development, as the coin releases a set number of new units each year that provide funding for development projects.
Ether is much more commonly known as Ethereum, which is the name of the blockchain on which Ether runs. At the moment, Ether is by far the most competitive Bitcoin alternative regarding both price and usage. The defining feature of Ether and its blockchain is a concept known as a smart contract. Smart contracts allow for the distribution of payments when a certain set of criteria is met, making it possible to prevent fraud and enforce the terms of sales contracts digitally. The Ethereum blockchain itself also has market value beyond its association with Ether. Owing to its open-source nature and general ease of use, Ethereum has been used by private individuals and businesses to issue many different kinds of digital tokens.
These are just a few of well over 1,300 cryptocurrencies that are competing with Bitcoin in the digital marketplace today. As the adoption of cryptocurrencies continues, it is likely that at least some of these Bitcoin alternatives will find niches in the evolving digital economy.