The de facto industry standard for cryptocurrencies, Bitcoin has inspired an ever-growing legion of followers and spinoffs. It has not only set trends by ushering in a wave of cryptocurrencies built on a decentralised peer-to-peer network, but it has also been a trendsetter.
Since Bitcoin isn't the only cryptocurrency out there, it's important to research the alternatives to see which ones are performing well. Here are several cryptocurrencies that have maintained their value despite sharp price increases and declines.
Cryptocurrencies: What Are They?
Let's take a step back and quickly go over what terms like "cryptocurrency" and "altcoin" mean before looking more closely at some of these alternatives to Bitcoin (BTC). In a broad sense, a cryptocurrency is described as virtual or digital currency that appears as tokens or "coins." Even though some cryptocurrencies have made their way into the real world through credit cards or other initiatives, the vast majority are still only digital.
Cryptography is a complex field of study that enables the creation and processing of digital currency as well as their transactions across decentralised systems. Along with this crucial "crypto" aspect, there is a shared dedication to decentralisation. Teams often create cryptocurrencies as code, adding in mechanisms for issuance (often, but not always, through a process called mining) and other regulations.
Although this fundamental component of the sector has come under scrutiny as cryptocurrencies have gained more popularity, it is usually always the case that they are not intended to be subject to government manipulation or control. The group of cryptocurrencies that are fashioned after Bitcoin is referred to as altcoins, and in some cases, shitcoins. These cryptocurrencies frequently attempt to position themselves as improved or modified versions of Bitcoin. Even while some of these currencies could have some eye-catching characteristics that Bitcoin does not, an altcoin has not yet managed to meet the level of security that Bitcoin's networks reach in most cases.
Altcoin Types
Cryptocurrencies
Cryptocurrencies are designed to be used for payments, sending value (similar to virtual currency) via a decentralised user network. Numerous altcoins—those that are not Bitcoin or occasionally Ethereum—are categorised in this fashion and are occasionally referred to as value tokens.
Tokens
Additionally, there are blockchain-based tokens created for purposes other than monetary exchange. A token that represents a stake in a blockchain or decentralized finance (DeFi) project and was released as part of an initial coin offering (ICO) is one illustration. Security tokens are those tokens that are connected to the project or company's worth (as in securities like stocks, not safety).
Some tokens are used for specific purposes. Examples include Namecoin, which offers decentralized Domain Name System (DNS) service for Internet addresses, or Storj tokens, which enable file sharing across a decentralized network. The term "utility tokens" refers to them.
While many cryptocurrency users today are aware of and appreciative of these differences, traders and non-technical investors might not be able to tell the difference because all token categories typically trade similarly on crypto exchanges.
Ethereum (ETH)
The first Bitcoin substitute on our list is Ethereum (ETH), a decentralized platform for building and executing smart contracts and decentralized applications (dApps) free from third-party interference, fraud, or control. Ethereum aims to build a decentralized ecosystem of financial services that anybody in the world can use freely, regardless of their country of origin, race, or religion. Because people in some nations who lack governmental infrastructure and official identification can access bank accounts, loans, insurance, and a wide range of other financial products, this factor makes the implications for such people more compelling.
Ethereum uses ether, a platform-specific cryptographic token, to power its apps. Developers that want to build and run applications on the Ethereum platform, as well as investors wishing to buy other digital currencies using ether, seek out ether (ETH), which functions as a mode of transportation on the Ethereum network.
Although it trails Bitcoin by a wide margin, Ether, which was introduced in 2015, is currently the second-largest digital currency by market capitalization.
Tether (USDT)
One of the first and most well-known stablecoins—cryptocurrencies that attempt to tether their market value to a currency or other external reference point in order to lessen volatility—was Tether (USDT). The majority of digital currencies, including popular ones like Bitcoin, have frequently experienced periods of extremely high volatility. Tether and other stablecoins aim to reduce this volatility in order to draw in consumers who may otherwise be wary. The cost of Tether is directly correlated with the value of the US dollar. Instead of truly converting to fiat money, the system enables users to transfer funds more quickly and easily from other cryptocurrencies back to dollars.
Tether, which was introduced in 2014, identifies as "a blockchain-enabled platform...to facilitate the use of fiat currency digitally." Effectively, this coin reduces the volatility and complexity frequently associated with digital currencies by enabling people to use a blockchain network and related technology to transact in traditional currencies.
USD Coin (USDC)
USD Coin is a stablecoin that uses fiat-collateralized reserves to peg its price to the U.S. dollar. As such, it holds an equivalent amount of fiat money to the total supply of USD Coin in circulation. The Centre Consortium, which consists of Circle and Coinbase, introduced USD Coin in 2018. Circle is a regulated stablecoin because it is based in the United States and is subject to regulation as a result.
Binance Coin (BNB)
A utility cryptocurrency called Binance Coin (BNB) is used to pay the commissions for trading on the Binance Exchange. It ranks third in terms of market capitalization among all cryptocurrencies. Trades can be made at a discount for those who pay for the exchange using the token.
The blockchain that powers Binance Coin also serves as the foundation for Binance's decentralised exchange. Based on trade volumes, Changpeng Zhao launched the Binance Exchange, which is among the most popular exchanges worldwide.
Binance USD (BUSD)
Binance, a cryptocurrency exchange, developed USD as a stablecoin linked to the dollar. The stablecoin is governed as well because the New York State Department of Financial Services approved it.
XRP
The XRP Ledger, developed by Ripple in 2012 as a payment system, uses XRP as its native coin. The XRP Ledger Consensus Protocol is the consensus process used by the XRP Ledger, and it does not rely on proof-of-work or proof-of-stake for consensus or validation. Instead, transactions are signed and sent to the ledger servers by client applications. After comparing the transactions, the servers come to the conclusion that they should be entered into the ledger.
The validators review the transaction candidates that the servers have sent them and decide if the servers have correctly captured the transactions before recording the ledger version.
Cardano (ADA)
An "Ouroboros proof-of-stake" cryptocurrency called Cardano (ADA) was developed using a research-based methodology by engineers, mathematicians, and cryptography professionals. Charles Hoskinson, one of the original five founding members of Ethereum, co-founded the project. He quit Ethereum because he didn't like the way it was going in and later worked on the creation of Cardano.
Cardano's development team built its blockchain through thorough testing and peer-reviewed research. The project's researchers have authored more than 120 articles on blockchain technology covering a range of subjects. The core of Cardano is built on this study.
Cardano stands out among its PoS counterparts and other well-known cryptocurrencies because of this stringent procedure. Cardano's blockchain is said to be more capable than Ethereum's, earning it the moniker "Ethereum killer." Nevertheless, Cardano is still in its infancy. It has surpassed Ethereum in adopting the PoS consensus architecture, but it still has a ways to go in terms of DeFi applications.
By creating DeFi products that are comparable to Ethereum's and offering solutions for chain interoperability, voter fraud, and legal contract tracing, among other things, Cardano intends to become the world's financial operating system.
Solana (SOL)
Solana is a blockchain platform created in 2017 and intended to facilitate decentralised applications (dApps). Solana, often known as an "Ethereum killer," processes far more transactions per second than Ethereum does. In comparison to Ethereum, it also has reduced transaction fees.
Smart contracts, which are necessary for running cutting-edge applications like decentralised finance (DeFi) and non-fungible assets, are supported by Solana and Ethereum (NFTs). Solana is the name of the cryptocurrency that operates on the Solana blockchain (SOL).
Dogecoin (DOGE)
The rise in price of Dogecoin (DOGE), sometimes referred to as the first "memecoin," created a stir in 2021. Some big businesses accept the coin, which has an avatar that looks like a Shiba Inu, as payment.
In 2013, Billy Markus and Jackson Palmer, two software programmers, invented Dogecoin. The coin was purportedly invented by Markus and Palmer as a joke against the irrational speculation in the cryptocurrency industry.
Polkadot
A distinct PoS coin called Polkadot (DOT) aims to foster interoperability between different blockchains. Its protocol is made to link oracles and blockchains with and without authorization, enabling systems to collaborate under one roof. The relay chain, which permits the interoperability of various networks, is the fundamental element of Polkadot. Additionally, it enables parachains, which are alternative blockchains with their own native coins for particular use cases.
Polkadot differs from Ethereum in that developers can create their own blockchains while utilising the security that Polkadot's chain already provides, as opposed to only developing dApps on Polkadot. Because the larger a blockchain is, the more security it has, developers using Ethereum can establish new blockchains, but they must also create their own security mechanisms. This leaves new and smaller projects vulnerable to attack. In Polkadot, this idea is referred to as shared security.
Gavin Wood, one of the original Ethereum project founders who had different ideas about the project's future, developed Polkadot.
The Importance of Cryptocurrencies
Blockchain-based cryptocurrencies enable people to conduct peer-to-peer financial transactions or sign contracts because they are decentralised platforms. No trustworthy third-party mediator, such as a bank, monetary authority, court, or judge, is required in any scenario. This might upend the current financial system and democratize finance. The scale of the cryptocurrency market has increased dramatically over the past ten years, thanks to new developments and a market cap of over $952 billion.
Why Do Cryptocurrencies Exist In Such Abundance?
The majority of cryptocurrencies in use today have some connection to Bitcoin, which has a censorship-resistant architecture and open-source code. This implies that anyone can duplicate the code, make changes, and produce their own unique coin.
What Other Significant Cryptocurrencies Exist?
Numerous cryptocurrencies have grown in significance or have the potential to do so. XRP, Solana, USD Coin, and Cardano are further significant coins.
Why Is Bitcoin the Most Valuable Cryptocurrency Today?
Despite the emergence of thousands of rivals, Bitcoin, the first cryptocurrency, continues to dominate the market in terms of usage and economic worth. So far, none have its market cap and value matched.
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