I find cryptocurrencies to be fascinating. I have been following Bitcoin's development closely since 2011, as I saw the big potential of it.
Bitcoin has made a spectacular breakout to the upside, which has made it so expensive that people are wondering what cryptocurrencies are alternatives to Bitcoin that are less expensive options. Many of the leading Bitcoin alternatives trade at just a fraction of Bitcoin’s price. However, just because a cryptocurrency trades at a less expensive price does not necessarily mean it translates into value and will eventually soar higher. The value of any asset and its potential to make a substantial move higher, be it a stock, bond, or cryptocurrency, is ultimately determined by a number of underlying factors, as well as reasonable assumptions regarding future developments.
To assess the true value and potential gains ahead for various cryptocurrencies that are alternatives to Bitcoin, it is important to research how various cryptocurrencies derive their valuations and what their prospects for the future are. That way, an investor can determine which ones are the best alternatives to Bitcoin and have the best chance to appreciate in value over time. Below is a look at some of the top digital currencies that may someday make a parabolic move higher as Bitcoin has.
The Top Alternative Cryptocurrencies to Bitcoin
Since Bitcoin hit the scene in obscurity in 2009, a growing number of alternative cryptocurrencies have been rolled out. What started as a very slow rollout, as Bitcoin’s price wallowed below $100 per coin, has turned into a torrent of new cryptocurrencies, as Bitcoin soared past $1,000 and onto tens of thousands of dollars.
There are now well over 1,000 alternative cryptocurrencies to choose from, with more being released every month. Of course, not all of these digital currencies are going to make it in the long run or make substantial gains as Bitcoin has. To sort through the myriad of options, we run through some of the top alternatives to Bitcoin based on their technological design and their future prospects for capturing market share in crowded space.
- Bitcoin Cash (BCH) is an obvious choice as an alternative because it was split off from Bitcoin when a group of developers decided they did not like how the digital currency was being developed. They wanted Bitcoin to adopt a larger block size to process transactions faster and at lower rates, so they broke away by creating a new currency called Bitcoin Cash. Some analysts think Bitcoin Cash may someday take over as the main Bitcoin digital currency.
- Ethereum (ETH) is a cryptocurrency that is associated with a developer project to decentralize computing so that computer applications can be run across a network of computers throughout the world. Interest in the cryptocurrency ETH has grown tremendously, so much so that it is a potential challenge to Bitcoin’s market capitalization.
- Litecoin (LTC) is high profile alternative to Bitcoin. It was the second cryptocurrency on the scene, with its origin in 2011. Litecoin transactions are faster and less expensive than Bitcoin. It is a solid alternative cryptocurrency with a developer team that is committed to improving it over time.
- Ripple (XRP) is an interesting cryptocurrency because the developers are not interested in bucking the established banking system like many other digital currencies. Rather, they are trying to work with businesses and major financial institutions that need a fast and inexpensive way to exchange currencies throughout the world. Ripple’s transactions are processed considerably faster than all of their rivals and at just a fraction of the fees paid for Bitcoin transactions.
- Cardano (ADA) is another cryptocurrency that has grown out of a decentralized computing platform project. ADA is verified via a “proof of stake” technique that, unlike Bitcoin, does not require the incredible amount of energy that Bitcoin requires to verify transactions. What sets ADA apart from others is that its developer team is seeking to provide advanced features to its computing platform that are not available elsewhere.
- IOTA (MIOTA) is different than many other cryptocurrencies because it is designed to facilitate commerce in the ever-growing Internet of Things (IoT), which is a term for smart appliances and machines connected and communicating via the Internet. MIOTA uses a system for tracking and verifying payments called Tangle, which is free of transaction fees because it utilizes the machines on the network rather than miners to verify payments randomly. This approach makes MIOTA infinitely scalable to meet greater demand in the future. It has some big companies onboard as partners, such as Microsoft, Fujitsu, and Bosch, which is a good sign that it may have a strong future position in the space.
- Dash (DASH) stands for “Digital Cash.” It appeals to those who value their privacy and want to do their digital currency transactions anonymously. It does this by running a decentralized network that is set up in a way to make transaction information nearly untraceable.
- Monero (XMR) is a secure, private, and untraceable cryptocurrency. It provides privacy via a special technology called “ring signatures,” which generates a group of cryptographic signatures that includes the real one and others that are decoys.
- Stellar (XLM) is a cryptocurrency project that is trying to work with the established financial system to facilitate fast and inexpensive transactions for commerce and currency exchange around the world.
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How to Evaluate Alternative Cryptocurrencies
Everyone is looking for the next Bitcoin that will rocket higher in value, but how do you evaluate alternative cryptocurrencies that may rival Bitcoin? Market capitalization is the main measure that analysts currently use to assign a relative value to digital currencies. While this may be a good way to assess how much interest there is in a particular cryptocurrency at any given time and how it compares to Bitcoin’s market capitalization, it does not provide any insight into the potential future movement of various digital currencies. To assess the future potential of a cryptocurrency, you need to take a look at the following:
- Its structure regarding the amount of coins that will be made available (the supply).
- its scalability in regards to how easily it can grow in the future to meet market needs.
- The planned improvements by its developer team that will give it a leg up on the competition.
- Potential partnerships with established companies that will provide it credibility and new opportunities for adoption.
- How it will fit into the future world of commerce (will it fill a niche that will create natural demand).
If you have any suggestions regarding other alternative cryptocurrencies to Bitcoin, please share them in the comments section below.
To Learn More About Cryptocurrencies, See The Article Below
- What Is Bitcoin and What Is a Cryptocurrency or Digital Currency
With all the talk in the media about Bitcoin and cryptocurrencies, many people are wondering just what these new computer traded currencies are. Develop an understanding of cryptocurrencies.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2017 John Coviello