Looking out for the Best e Currency to Invest in? Bitcoin not only started a wave of cryptocurrencies built on a decentralized peer-to-peer network, but it has also become the de facto standard for cryptocurrencies, leading to a growing number of followers and spinoffs.
Since Bitcoin isn’t the only cryptocurrency, it’s important to look into other ones and find out which ones are doing well besides Bitcoin. Here are some cryptocurrencies that have stayed around even though their prices have gone up and down quickly.
What Are Cryptocurrencies?
Before we look more closely at some of these alternatives to Bitcoin (BTC), let’s take a step back and define words like cryptocurrency and altcoin. In a broad sense, a cryptocurrency is digital or virtual money that comes in the form of tokens or “coins.” Even though credit cards and other projects have brought some cryptocurrencies into the real world, the vast majority of them are still only digital.
The “crypto” in “cryptocurrencies” refers to the complicated cryptography that makes it possible to create and process digital currencies and their transactions across systems that don’t have a central point of control. Along with this important “crypto” feature is a commitment to decentralization. Cryptocurrencies are usually built as code by teams who build in mechanisms for issuance (often, but not always, through a process called “mining”) and other controls.
Almost all cryptocurrencies are made to be free from government control and manipulation. However, as cryptocurrencies have become more popular, this fundamental part of the industry has come under fire. Altcoins, and sometimes shitcoins, are a group of cryptocurrencies that are based on Bitcoin. They have often tried to present themselves as changed or better versions of Bitcoin. Even though some of these currencies may have cool features that Bitcoin doesn’t have, none of them have been able to match the level of security that Bitcoin’s networks have.
Types of Altcoins
Cryptocurrencies
Cryptocurrencies are meant to be used for payments. They send value (like digital money) across a network of users without a central authority. In this way, many altcoins (coins that aren’t Bitcoin or sometimes Ethereum) are grouped, and they may also be called “value tokens” at times.
Tokens
There are also tokens based on the blockchain that are not meant to be used as money. One example could be a token given out as part of an initial coin offering (ICO) that represents a stake in a blockchain or decentralized finance (DeFi) project. If the value of the company or project is tied to the tokens, they can be called security tokens (as in securities like stocks, not safety).
Other tokens are used in a certain way or serve a certain purpose. Some examples are Storj tokens, which let people share files across a decentralized network, and Namecoin, which lets Internet addresses be looked up through a decentralized Domain Name System (DNS).
These things are called “utility tokens.”
Even though many crypto users understand and appreciate these differences, traders and casual investors may not notice them because all types of tokens tend to trade on crypto exchanges in the same way.
1. Polkadot
Polkadot (DOT) is a unique Proof-of-Stake cryptocurrency that aims to make other blockchains work together. Its protocol is made to connect permissioned and permissionless blockchains and oracles so that systems can work together under one roof. Polkadot’s most important part is its relay chain, which lets different networks work together. It also makes parachains possible, which are parallel blockchains with their own tokens for specific uses.
Polkadot is different from Ethereum in that developers don’t just make dApps on it; they can also make their own blockchains and use the security that Polkadot’s chain already has. With Ethereum, developers can make new blockchains, but they have to come up with their own security measures. This can leave new and smaller projects vulnerable to attacks, since a blockchain’s security gets better as it gets bigger. The term for this idea in Polkadot is “shared security.”
Gavin Wood, one of the core founders of the Ethereum project, made Polkadot. He and the other core founders had different ideas about the project’s future. As of September 18, 2022, Polkadot was worth about $7.5 billion on the market, and one DOT was worth $6.78.
2. Ethereum (ETH)
Ethereum (ETH), the first Bitcoin alternative on our list, is a decentralized software platform that makes it possible to build and run smart contracts and decentralized applications (dApps) without any downtime, fraud, control, or interference from a third party. The goal of Ethereum is to make a set of decentralized financial products that anyone in the world, no matter their country, race, or religion, can freely use.
People in some countries are more likely to be affected by this because it means that people without state infrastructure and state IDs can get bank accounts, loans, insurance, and a wide range of other financial products.
The applications on Ethereum run on ether, a cryptographic token that is unique to the platform. Ether (ETH) is like a way to get around on the Ethereum platform. It is mostly used by developers who want to build and run apps on Ethereum, or by investors who want to use ether to buy other digital currencies.
Ether, which came out in 2015, is the second-largest digital currency by market capitalization right now, after Bitcoin, though it is far behind the most popular cryptocurrency. As of September 18, 2022, one ETH was worth about $1,383, and ether’s market cap, which was $169.5 billion, was less than half of Bitcoin’s.
3. Tether (USDT)
Tether (USDT) was one of the first and most popular “stablecoins.” These are cryptocurrencies that try to tie their market value to a currency or other external reference point to reduce volatility. Most digital currencies, even big ones like Bitcoin, have had times when their prices changed a lot. Tether and other stablecoins try to make price changes less dramatic so they can attract users who might otherwise be cautious.
The value of Tether is directly linked to the value of the U.S. dollar. The system lets people transfer money from other cryptocurrencies back to U.S. dollars more quickly and easily than if they had to convert to regular currency.
Tether was started in 2014 and calls itself “a blockchain-enabled platform” that makes it easier to use fiat currency online.
This cryptocurrency lets people use a blockchain network and related technologies to make transactions in traditional currencies while reducing the volatility and complexity that are often associated with digital currencies.
As of September 18, 2022, Tether is the third-largest cryptocurrency by market capitalization, with a market cap of $67.9 billion and a value of $1.00 per token.
4. USD Coin (USDC)
USD Coin is another stablecoin that ties its price to the U.S. dollar using fiat-collateralized reserves. This means that for every USD Coin in circulation, it holds the same amount of fiat currency.
The Center Consortium, which is made up of Circle and Coinbase, launched USD Coin in 2018. USD Coin is a regulated stablecoin because Circle is based in the U.S. and is subject to regulation.
On September 18, 2022, each USD Coin was worth $1.00 and the market cap was $55.5 billion. It had the fourth-highest market value and the fourth-most trades.
5. Binance Coin (BNB)
Binance Coin (BNB) is a utility cryptocurrency that can be used to pay the fees for trading on the Binance Exchange. It has the third-largest market capitalization of all cryptocurrencies.
Those who pay for their trades with tokens get a discount.
The blockchain for Binance Coin is also the platform on which the decentralized exchange for Binance Coin runs. Changpeng Zhao started the Binance Exchange, which is one of the most-used exchanges in the world based on the amount of money that moves through it.
The first version of Binance Coin was an ERC-20 token that ran on the Ethereum blockchain. It had its own mainnet launch in the end. A PoS consensus model is used by the network. As of September 18, 2022, Binance Coin has a market cap of $44.1 billion, and one BNB is worth about $273.34.
6. Binance USD (BUSD)
Binance USD is a stable coin that is tied to the U.S. dollar. It was made by the cryptocurrency exchange Binance. The New York State Department of Financial Services gave its OK to the stablecoin, so it is also regulated.
On September 18, 2022, the market capitalization of BUSD was $20.5 billion, and each coin was worth $1.00.
7. XRP
Ripple made the XRP Ledger as a payment system in 2012, and XRP is the token that works with it. The XRP Ledger uses a consensus mechanism called the XRP Ledger Consensus Protocol. This protocol doesn’t use proof-of-work or proof-of-stake for consensus and validation. Instead, client programs sign transactions and send them to the ledger servers. After that, the servers compare the transactions and decide if they should be added to the ledger.
The servers then send the possible transactions to validators. The validators work to agree that the servers got the transactions right and record the ledger version.
On September 18, 2022, XRP was worth about $0.39 and had a market capitalization of $19.6 billion.
8. Cardano (ADA)
Cardano (ADA) is a “Ouroboros proof-of-stake” cryptocurrency made by engineers, mathematicians, and cryptography experts using a research-based approach. Charles Hoskinson, who was one of Ethereum’s five original founders, helped start the project. He left Ethereum because he didn’t agree with the way it was going. He later helped make Cardano.
The team behind Cardano made its blockchain through a lot of testing and research that was reviewed by experts in the field. The people behind the project have written more than 120 papers on different aspects of blockchain technology.
This research is what holds Cardano together.
Due to this rigorous process, Cardano stands out among its PoS peers and other prominent cryptocurrencies. Cardano has also been called a “Ethereum killer” because its blockchain is said to be able to do more than Ethereum’s. Cardano is still in its early stages, though. Even though it beat Ethereum to the PoS consensus model, it has a long way to go before it can be used for DeFi apps.
Cardano wants to be the world’s financial operating system by making DeFi products similar to Ethereum’s and coming up with solutions for things like interoperability between chains, voter fraud, and tracing legal contracts. On September 18, 2022, Cardano had a market capitalization of $15.9 billion, which made it the eighth largest. One ADA was worth about $0.47.
9. Solana (SOL)
Solana is a blockchain platform that was started in 2017 to support decentralized apps (dApps). Solana does a lot more transactions per second than Ethereum and has been called a “Ethereum killer.” Also, its transaction fees are lower than those of Ethereum.
Solana and Ethereum can both use smart contracts, which are needed to run cutting-edge apps like decentralized finance (DeFi) and tokens that can’t be exchanged for cash (NFTs). But there are some major differences between the two.
Ethereum uses a proof of work (PoW) blockchain, which means that miners compete to solve difficult puzzles in order to confirm transactions. This technology uses more energy and is therefore worse for the environment. Proof of Stake (PoS), on the other hand, is said to be less harmful than Proof of Work (PoW).
Solana is the name of the currency that runs on the Solana blockchain (SOL). Since it first came out, its price has gone up a lot. Solana was worth about $32.46 and had a market capitalization of $11.5 billion on September 18, 2022. This made it the ninth largest cryptocurrency by market capitalization.
10. Dogecoin (DOGE)
Some people think of Dogecoin (DOGE) as the first “memecoin.” In 2021, its price went through the roof, which made a lot of people upset. Some big companies will take the coin, which has a picture of a Shiba Inu on it, as a form of payment.
In 2013, two software engineers named Billy Markus and Jackson Palmer came up with the idea for Dogecoin. People say that Markus and Palmer made the coin as a joke to make fun of how crazy the cryptocurrency market is.
Dogecoin was the 10th-largest cryptocurrency as of September 18, 2022, when its market capitalization was $7.9 billion and one DOGE was worth about $0.06.
