Not only has Bitcoin not only been a trendsetter that has created a wave of cryptocurrencies built on a decentralized peer-to-peer network, it has also become the de facto standard for cryptocurrencies, inspiring an ever-growing legion of followers and subsidiaries.
10 IMPORTANT CRYPTOCURRENCIES OUTSIDE BITCOIN
While Bitcoin is widely seen as a pioneer in the world of cryptocurrencies, analysts are taking many approaches to evaluating tokens other than BTC. For example, it is common for analysts to attach great importance to the ranking of coins in terms of market capitalization. We have included this in our account, but there are other reasons why a digital token would be included in the list.
The first Bitcoin alternative on our list, Ethereum is a decentralized software platform that allows Smart Contracts and Decentralized Applications (DApp) to be built and run without any downtime, fraud, control, or intervention by a third party. The goal behind Ethereum is to create a decentralized suite of financial products that anyone in the world can access for free, regardless of nationality, ethnicity, or creed. Because those without state infrastructure and state ID have access to bank accounts, loans, insurance, or a variety of other financial products, this feature makes the consequences more challenging for those in some countries.
Applications in Ethereum are run on ether, the cryptographic token specific to the platform. Ether is like a tool for navigating the Ethereum platform and is mostly sought after by developers who want to develop and run applications within Ethereum or, now, by investors who want to buy other digital currencies using ether. Launched in 2015, Ether is currently the second largest digital currency in terms of market capitalization after Bitcoin, but by a significant margin it lags behind the dominant cryptocurrency. As of January 2021, the market capitalization of Ether is roughly 19% of Bitcoin’s size.
In 2014, Ethereum launched a pre-sale for ether, which received an overwhelming response; this helped usher in the era of initial coin offering (ICO). According to Ethereum, it can be used to “encode, decentralize, secure, and trade almost anything.” Following the attack on the DAO in 2016, Ethereum was split into Ethereum (ETH) and Ethereum Classic (ETC). As of January 2021, Ethereum (ETH) had a market capitalization of $138.3 billion and a per-token value of $1,218.59.
In 2021, Ethereum plans to change its consensus algorithm from proof of work to proof of risk. This move will allow Ethereum’s network to run itself with much less energy and improved transaction speed. Proof of collateral allows network participants to “share” their own ether in the network. This process helps to secure the network and process the transactions that take place. Those who do so are rewarded similarly to the interest account. This is an alternative to Bitcoin’s proof-of-work mechanism, where miners are rewarded with more Bitcoins for processing transactions.
Launched in 2011, Litecoin was among the first cryptocurrencies to follow in Bitcoin’s footsteps and is often referred to as “silver to Bitcoin’s gold.” It was created by Charlie Lee, an MIT graduate and former Google engineer. Litecoin is based on an open-source global payment network that is not controlled by any central authority and uses “scrypt” as a proof-of-work that can be decoded with the help of consumer-grade CPUs. Although Litecoin is similar to Bitcoin in many ways, it has a faster block generation rate and therefore offers a faster transaction confirmation time. Apart from developers, there are a growing number of merchants who accept Litecoin. As of January 2021, Litecoin had a market capitalization of $10.1 billion and a per-token value of $153.88, making it the sixth largest cryptocurrency in the world.
Cardano is an “Ouroboros proof-of-proof” cryptocurrency created by engineers, mathematicians, and cryptographers through a research-based approach. The project was founded by Charles Hoskinson, one of the first five founding members of Ethereum. After having some disagreements about the direction Ethereum was headed, he left and later helped create Cardano.
The team behind Cardano built the blockchain through extensive experiments and peer-reviewed research. The researchers behind the project have written more than 90 papers on blockchain technology on a variety of topics. This research is the backbone of Cardano.
Because of this rigorous process, Cardano, among other major cryptocurrencies, seems to stand out among its proof-of-stake peers. Cardano has also been dubbed the “Ethereum killer” because it has been said that blockchain can do more. However, Cardano is still in its early stages. While Ethereum has beaten the proof-of-stake consensus model, it still has a long way to go in terms of decentralized financial applications.
Cardano aims to become the world’s financial operating system by creating decentralized financial products similar to Ethereum and providing solutions for chain interoperability, voter fraud, and legal contract tracking, among other things. As of January 2021, Cardano has a market capitalization of $9.8 billion and an ADA transaction of $0.31.
Polkadot is a unique proof-of-stake cryptocurrency that aims to provide interoperability between other blockchains. Its protocol is designed to connect authorized and permissioned blockchains, as well as oracles, to allow systems to work together under one roof.
The main component of Polkadot is the relay chain, which allows changing networks to work together. It also allows “parachain” or parallel blockchains with their own native tokens for specific use cases.
Where this system differs from Ethereum is that instead of just building decentralized applications in Polkadot, developers can create their own blockchains while using the security that the Polkadot chain already has. With Ethereum, developers can create new blockchains, but they need to create their own security measures that can leave new and smaller projects vulnerable to attack, because the larger a blockchain, the more security it has. This concept in Polkadot is known as shared security.
Polkadot was created by Gavin Wood, another member of the core founders of the Ethereum project, who has different views on the future of the project. As of January 2021, Polkadot has a market capitalization of $11.2 billion and a DOT transaction of $12.54.
Bitcoin Cash (BCH) has an important place in the history of altcoin as it is one of the oldest and most successful hard forks of the original Bitcoin. In the world of cryptocurrencies, a bifurcation occurs as a result of discussions and debates between developers and miners. Due to the decentralized nature of digital currencies, wholesale changes to the underlying code of the token or coin at hand must be made based on general consensus; the mechanism of this transaction varies according to the specific cryptocurrency.
When different groups fail to reach an agreement, sometimes the digital currency splits, the original chain remains faithful to its original code, and the new chain begins life as a new version of the previous coin with changes in its code.
BCH began its life in August 2017 as a result of one of these divisions. The debate that led to the creation of BCH was about the issue of scalability; The Bitcoin network has a limit on block size: one megabyte (MB). BCH increases the block size from one MB to eight MB; The idea is that larger blocks can hold more transactions within themselves, and therefore the transaction speed will increase. It also makes other changes, including the removal of the Reserved Witness protocol that affects block space. As of January 2021, BCH had a market capitalization of $8.9 billion and a value of $513.45 per token.
