A diversified cryptocurrency market means access to innovative ways to use blockchain technology. Bitcoin is still at the core of the crypto revolution, yet various altcoins are showing promising prospects. Nobody knows what the future might bring and BTC’s dominance should not be taken for granted. As a result, a brief guide to altcoins is needed, so beginners will know what other major alternatives are currently available.
Are Bitcoin alternatives necessary?
Since Bitcoin continues to be under pressure, interest in altcoins that have a high growth potential is surging. On top of that, there are several structural flaws with BTC, like the limited supply, which makes it difficult to make this crypto a global medium of exchange. The supply would not be enough to satisfy the potential demand, which puts altcoins in a favorable position.
Ethereum
First described in a 2013 white paper by Vitalik Buterin, Ethereum is a decentralized opensource blockchain system, featuring its own cryptocurrency – Ether. The main goal of the platform is to allow decentralized applications to work properly, and users from all over the world to write and run software on the Ethereum blockchain.
This project had pioneered the concept of smart contracts, which reduce the need for trusted intermediaries between contractors. At the same time, Ethereum is currently undergoing a major transition period, with major improvements in terms of scalability, blockchain efficiency, and security.
Bitcoin Cash
Same as with Bitcoin, Bitcoin Cash is a peer-to-peer electronic cash system that wants to offer a more scalable solution. It came to life in 2017 out of this need, when the community around Bitcoin split, resulting in a fork, leading to the creation of Bitcoin Cash.
In this case, the block size had been increased substantially, so the blockchain can handle more transactions per second. For the time being, the Bitcoin Cash block size is 32 MB.
Due to its large market capitalization and availability via large brokerages, buying Bitcoin Cash via Contracts for Difference is now possible. Retail traders from all around the world can take advantage of price movements without having physical exposure to BCH.
Stellar
Released in 2014 to boost financial inclusion for the unbanked, Stellar had gradually shifted priorities and now helps financial firms connect with each other using the blockchain technology. One of the main features making the Stellar blockchain competitive has to do with costs. Every transaction costs just 0.00001 XLM, a more viable approach as compared to Bitcoin.
Stellar grew in popularity over the years and had even teamed with IBM to launch World Wire, a project allowing financial companies to transact using bridge assets like stablecoins on the Stellar blockchain.
With more than 10,000 different altcoins in existence, there are plenty of blockchain applications to choose from. However, several projects like Ethereum, Stellar, or Bitcoin Cash stand out and now hold a high market capitalization. These altcoins benefit from strong interest coming from both retail and institutional investors.
