If you have been following the crypto sphere, you are probably aware that cryptos other than Bitcoin, collectively known as altcoins, have been gaining a lot of attention. In fact, at the time Bitcoin reached its peak popularity back in December 2017, altcoins found their place under the Sun, as investors who were unable to afford to pay approximately $20k were looking for the next big thing.
Before we make the ultimate call on what a better investment opportunity is, let’s first discuss what altcoins actually are.
What are Altcoins?
Altcoins is a name derived from the phrase alternative cryptocurrency coins. These are basically all kinds of cryptocurrencies out there that are not Bitcoin. Even the ones which forked from Bitcoin, such as the popular Bitcoin Cash crypto, are considered altcoins. Therefore, to buy altcoin is simply an alternative to buy Bitcoin. However, some of them have become so popular that they are even considered the next #1 crypto. Some of the candidates that you should take into account are Ethereum, BCH, Ripple, and more.
But what makes altcoins so different from Bitcoin? Read on!
What’s the difference between Altcoins and Bitcoin?
You cannot really point a finger at the possible differences between altcoins and Bitcoin, since the former is a group of various cryptocurrencies, and each of them is pretty unique. The only difference is just in the name. People needed a label to mark all the cryptos that are not Bitcoin. You cannot really
blame them, as all altcoins were not half as popular as Bitcoin a couple of years ago.
In other words, Bitcoin is the “original,” and all the other coins are simply copies. It’s true that the majority of them are more or less based on the underlying technologies upon which Bitcoin was built — mainly the blockchain technology. On the other hand, altcoins also offered some of the solutions to the problems that Bitcoin have been experiencing for some time.
The blockchain technology is very young. In fact, we can still consider that it is in the beta stage of development. Many developers and blockchain professionals still explore its potential, creating various new cryptocurrencies in the process.
Altcoins cannot be observed as one unity, given their number and individual differences. Therefore, let’s explore some of the most popular altcoins nowadays, and see how they are different in comparison to Bitcoin.
Ethereum is actually a platform that provides a framework for building decentralized apps. The entire idea is pretty revolutionary, with Buterin and his colleagues continuously improving the platform and the technology. Many believe in the idea that Ethereum represents, along with its cryptocurrency called Ether, making it the second most popular crypto at the moment.
Ripple is not only a cryptocurrency but an entire payment protocol offering a crypto exchange, remittance network and more. It aims to further improve payment systems and make money transactions easier around the world. Unlike Bitcoin, Ripple is friend with banks, working together with
them to improve payments.
Litecoin was built with an idea in mind to create a “lighter” version of Bitcoin. The total number of bitcoins that can ever be made is 21 million. However, the creator of Litecoin increased that number to 84 million for his cryptocurrency. Using additional technology improvements, Litecoin is much faster than Bitcoin, processing transactions a lot quicker.
The main reason why Bitcoin Cash forked from Bitcoin is that many miners and computer professionals behind Bitcoin did not see the future in this cryptocurrency unless something changes. Other Bitcoin pros liked the way things were at that moment, resulting in the creation of Bitcoin Cash — an event known as the hard fork. Bitcoin Cash has a larger block size compared to Bitcoin, meaning the network is much faster and can process the speed with which new blocks are verified. On the other hand, the security of the network was somewhat compromised, meaning that people who choose between BCH
and BTC often don’t know whether to compromise security or speed.
Despite the overall popularity of all altcoins, the market cap of every individual crypto is still not that close to Bitcoin. At the moment, the total market cap for Bitcoin is approximately $185.48 billion. The next most popular crypto is Ethereum, and it has a market cap of $19.97 billion. Just for the sake of compassion, we are going to include the market cap of the several other most popular altcoins:
● Ripple — $11.2 billion
● Bitcoin Cash — $ 5.5 billion
● Litecoin — $4.7 billion
Other altcoins that are doing pretty well at the moment are Binance Coin ($4.7 billion), Tether ($4 billion), EOS ($3.3 billion), and more. What do these numbers tell us? Well, we can safely conclude that Bitcoin is still #1 and that other altcoins are nowhere near it.
However, the market cap is not the only thing that makes something a safe investment. All it takes for Bitcoin to go down is for one of the creators of altcoins to come up with a sort of breakthrough that would further improve cryptocurrencies. Vitalik Buterin and his Ethereum platform are doing so far at the moment, but since Libra joined the game along with a couple of additional big players, the big picture might be completely different in the
To sum up, the answer to the topic question is very difficult to provide simply because the question itself is not formed well. Instead of asking, “Should you invest in Bitcoin or altcoins?” you should ask, “What cryptocurrency you should invest in?”
Altcoins have become very popular, and each of them is unique and offers something that other coins don’t have. Therefore, it is up to you to choose which one suits you the most, and invest your money in it. Naturally, Bitcoin is still the safest bet as it is still the most popular at the moment, but the future is
very uncertain and unpredictable, meaning a lot can change in a couple of years.
Author: Julia Beyers, a guest author at Token Valley
Note: The views and opinions expressed in this article are those of the particular author.