Experts can agree on which cryptocurrencies belong in the list of top 10 alternatives to Bitcoin, but they do not agree on the sequential order. A review of opinions shows that one of the biggest altcoins ranks the highest in popularity and importance, but another major contender places last.
Altcoins resemble Bitcoins but offer different values and goals with modifications and improvements that may appeal to someone considering getting into crypto. Consideration of the pros and cons of each Bitcoin alternative may provide access to newer features that interest investors.
1. Ethereum (ETH)
Tremendous growth between 2016 and late 2022 makes the cryptocurrency/blockchain platform a preferred choice of program developers running applications within Ethereum. Its decentralized software platform allows smart contracts to execute automatically. In addition, decentralized applications can run without third party interference, downtime, controls or fraud. Ethereum makes a range of financial products available to anyone without any restrictions on nationality or other characteristics. Investors in countries that have no state identifications or infrastructure can get into bank accounts, insurance policies, loans or other financial products. Further, it allows investors to purchase other digital currencies through ether.
2. Tether (USDT)
Although Andy Sto ranks Tether as last in the list of the top 10, Forbes and Investopedia place it near the top. The popular stable coin differs from other cryptocurrencies by its backing by flat currencies. It supposedly maintains a value equal to the UK pound, US dollars or the euro. Tether’s theory supports the concept of making its value more consistent than the other cryptocurrencies. The high level of volatility of some other coins may tend to draw investors to it. Even Bitcoin has experienced dramatic periods of volatility frequently. Directly tied to the U.S. dollar, Tether lets users transfer from other cryptocurrencies more easily. In addition, users can make fast transactions with minimal fees. Investors can enjoy a more efficient time frame than available when converting to normal currency. Even with reduced volatility, Tether offers almost no profit, making it a poor choice for trading.
3. USD Coin (USDC)
Also a stable coin, USD Coin performs similarly to Tether by linking to fiat-collateralized reserves. Fiat currencies consist of monies that governments issue and back, such as the yen, euro or U.S. dollar. The contrast makes them different from digital cryptocurrencies that banks and other central authorities do not issue. USD Coin’s fiat currency equals the amount that USD Coin places in circulation. Launched by the Centre Consortium comprising Circle and Coinbase in 2018, USD Coin became a regulated stable coin because of Circle’s base in the United States.
4. Binance Coin (BNB)
Investopedia ranks Binance Coin somewhat higher than Andy Sto and much higher than Forbes that does not put it in the top 10. Investors who use the utility cryptocurrency to pay fees for trading on the Binance Exchange can receive a discount. BNB’s market capitalization makes it the third-largest cryptocurrency. In addition to paying transaction fees, users can use it for shopping with a Visa Card, to make payments, gain interest and make trades. Differing from Bitcoin, BNB has a limited number that tops out at 200 million pre-mined coins. Binance generates demand by taking coins out of circulation to encourage investors to hold or buy the coin.
The founders of Ripple created XRP, a product of its digital technology company that provides payment processing. XRP serves as the XRP Ledger’s native token. Investors can use XRP on that network for facilitating the exchange of different types of currencies. The system can handle fiat currencies as well as other types of major currencies. Its XRP Ledger Consensus Protocol uses neither proof-of-work nor proof-of-stake for consensus or validation. Alternatively, it allows client applications to sign and send transactions over to the ledger’s servers. A comparison of transactions can confirm that the transactions become candidates for entering into the ledger. Subsequently, the validators receive the transaction candidates from the servers. The validators attempt to agree on the validity of the servers treatment of the transactions, later recording the ledger version.
6. Cardano (ADA)
Forbes and Investopedia put Cardano at almost the same position, but Andy Sto puts it near the top of the list. Created by a founder of Ethereum, Cardano stands out for its proof-of-stake cryptocurrency technology. ADA originated from a massive amount of research by engineers, mathematicians and cryptographers, contributing to its reputation as an ”Ethereum killer.” Plans for Cardano’s future include making it the world’s most efficient financial operating system with hopes to solve voter fraud and other critical issues. Its early focus on proof-of-stake validation helps speed transaction time and decrease energy usage by avoiding impediments transaction verification on platforms like Bitcoin and others. Cardano works similarly to Ethereum by enabling smart contracts and decentralizing applications with its native coin.
7. Solana (CRYPTO-SOL)
Smart contract capability and use of decentralized apps contribute to Solana’s strong growth. As a result, it has become one of the world’s largest programmable blockchains. As a rival to Ethereum, it appeals to investors with its fast and cheap transaction capability. Some reports indicate that it can accept 65,000 per second, keeping the per transaction price extremely low. Solana’s hybrid approach to an algorithm that validates transactions makes it different from other blockchains. While most others choose one consensus mechanism, usually proof-of-stake, Solana combines it with proof of history to produce faster processing. Developers can use the open-source blockchain to create a free payments framework that lets merchants accept customer payments through Solana’s network.
8. Polkadot (DOT)
Some experts place Polkadot near the bottom of the top 10 list, but they do express an opinion about it. A review of expert opinions reveals that other blockchains receive only one recommendation. The unique capability of DOT allows it to host other blockchains and connect them with each other. While most cryptocurrencies operate independently with their own blockchain, Polkadot uses a multichain network that joins different blockchains together. Its interoperability lets developers build blockchains that can interact with others in its network. Polkadot’s protocol benefits developers by taking care of transaction validation and network security. Its ability to process transactions on the Polkadot network’s relay chain allows developers to avoid the need to build security for the process.
9. Dogecoin (DOGE)
Even though it may have had no serious intent when it started in 2013, some major companies accept Dogecoin as a form of payment. The two software engineers who created the original meme coin that features a dog as its avatar may have done so to have some fun with it. However, the crazy speculation about the cryptocurrency market at that time gave way to worldwide acceptance. It still offers a fun way to choose something other than Bitcoin. No upper limit allows the mining of 10,000 new coins per minute, partially explaining its extreme volatility. The currency may experience devaluation as the supply of coins increases. However, for anyone starting out, it offers a chance to investigate and explore a fun opportunity.
10. Litecoin (LTC)
Running on an open source blockchain uncontrolled by a central authority, Litecoin follows behind Bitcoin but offers faster transactions. The decentralized digital coin functions without reliance on a centralized financial institution. With its faster block generation rate and a much larger supply of coins in circulation, it has attracted more merchants to accept it. Fast processing makes it a favorite of merchants by requiring about a quarter of processing time than Bitcoin transactions need.
Considering the Top Ten Altcoins
Blockchain-based cryptocurrencies allow anyone to engage in peer-to-peer financial transactions or to enter into contracts without banks, courts, judges or monetary authorities. However, investing in cryptocurrencies creates a highly speculative and risky environment. The lack of uniform opinions expressed by sources cited within this review reinforces the need for investors to consult a qualified professional before deciding on any financial matter.
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