10 Important Cryptocurrencies Other Than Bitcoin (Investopedia)
10 Important Cryptocurrencies Other Than Bitcoin (Investopedia)
Bitcoin has not only been a trendsetter, ushering in a wave of cryptocurrencies built on a decentralized peer network—it has also become the de facto standard for cryptocurrencies, inspiring an ever-growing legion of followers and spinoffs.
Because it isn’t the only cryptocurrency available, looking into others and finding out which ones besides Bitcoin are doing well is essential. Here are some alternative cryptocurrencies that have held on throughout steep price climbs and nosedives.
Key Takeaways
– Bitcoin continues to lead the pack of cryptocurrencies in terms of market capitalization, user base, and popularity.
– Other virtual currencies, such as Ethereum, are helping to create decentralized financial (DeFi) systems.
– Some altcoins have been endorsed as having newer features than Bitcoin, such as the ability to handle more transactions per second or use different consensus algorithms.
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What Are Cryptocurrencies?
Before taking a closer look at some of these alternatives to
Bitcoin (BTC), let’s step back and briefly examine what we mean by ” cryptocurrency” and ” altcoin”:
– A cryptocurrency, broadly defined, is virtual or digital money that takes the form of “tokens” or “coins.”
– The cryptocurrencies modeled after Bitcoin are collectively called altcoins and have sometimes tried to present themselves as modified or improved versions of Bitcoin.
The “crypto” in cryptocurrencies refers to the cryptographic technics that allow for creating and processing digital currencies. Alongside this important “crypto” feature is a common commitment to remaining decentralized; cryptocurrencies are typically developed by teams who build in mechanisms for issuance (often, although not always, through a process called
mining) and other controls.
Cryptocurrencies are almost always designed to be free from government manipulation and control—although, as they have grown more popular, this foundational aspect of the industry has come under fire.
Types of Altcoins
Cryptocurrencies
Cryptocurrencies are intended for payments, transmitting value (akin to digital money) across a decentralized network of users. Many altcoins (i.e., those that are not Bitcoin or sometimes Ethereum) are classified in this way.
Tokens
There are also blockchain-based tokens that are meant to serve a different purpose from that of money. One example could be a token issued as part of an
initial coin offering (ICO) that represents a stake in a blockchain or decentralized finance (DeFi) project. If the tokens are linked to the value of the company or project, they can be called security tokens (as in securities like stocks, not safety).
Other tokens have a particular use case or function. Examples include
Storj tokens, which allow people to share files across a decentralized network, or Namecoin, which provides a decentralized Domain Name System (DNS) service for internet addresses. These are known as utility tokens.
Today, while many crypto users understand and appreciate these differences, traders and lay investors may not notice the difference because all categories of tokens tend to trade on
crypto exchanges in the same way.
1. Ethereum (ETH)
The first Bitcoin alternative on our list,
Ethereum (ETH), is a decentralized software platform that enables smart contracts and decentralized applications (dApps) to be built and run without any downtime, fraud, control, or interference from a third party. The goal behind Ethereum is to create a decentralized suite of financial products that anyone in the world can freely access, regardless of nationality, ethnicity, or faith. This aspect makes the implications for people in some countries more compelling because those without state infrastructure and state identifications can get access to bank accounts, loans, insurance, or a variety of other financial products.
Ethereum uses ether, its platform-specific cryptographic token. Ether (ETH) is used to pay validators who stake their coins for their work for the blockchain, as a payment method off-chain, and as an investment by speculators.
On Sep. 15, 2022, Ethereum completed its long-anticipated transition to the proof-of-stake (PoS) validation method. PoS is less energy intensive because it removes incentivized mining, makes the blockchain more efficient, and allows it to scale better.
Ether, launched in 2015, is currently the second-largest digital currency by market capitalization after Bitcoin, although it lags behind the dominant cryptocurrency by a significant margin. Trading at around $1,877 per ETH on July 22, 2023, ether’s market cap of $226 billion was less than half of Bitcoin’s.
2. Tether (USDT)
Tether (USDT) was one of the first and most popular of the stablecoins—alternative cryptocurrencies that aim to peg their market value to a currency or other external reference point to reduce volatility. Because most digital currencies, even major ones like Bitcoin, have experienced frequent periods of dramatic volatility, Tether and other stablecoins attempt to smooth out price fluctuations to attract users who may otherwise be cautious.
Tether’s price is tied directly to the U.S. dollar because the developers claim to hold one U.S. dollar for every circulating USDT. This system allows users to more easily make transfers from other cryptocurrencies back to U.S. dollars in a more timely manner than actually converting to standard currency.
Launched in 2014, Tether describes itself as “a blockchain-enabled platform…to make it easier to use fiat currency digitally.” Effectively, this cryptocurrency allows individuals to utilize a blockchain network and related technologies to transact in traditional currencies while minimizing
the volatility and complexity often associated with digital currencies.
On July 22, 2023, Tether was the third-largest cryptocurrency by market capitalization, with a market cap of $83.8 billion and a per token value of $1.00.
3. XRP
XRP is the
native token for the XRP Ledger, created as a payment system by Ripple in 2012. The XRP Ledger uses a consensus mechanism called the XRP Ledger Consensus Protocol, which doesn’t use proof-of-work or proof-of-stake for consensus and validation. Instead, client applications sign and send transactions to the ledger servers. The servers then compare the transactions and conclude whether they are candidates for entry into the ledger.
The servers then send the transaction candidates to validators, who work to agree that the servers got the transactions right and record the ledger version.
On July 22, 2023, XRP had a market cap of about $39.3 billion and traded around $0.74.
4. Binance Coin (BNB)
Binance Coin (BNB) is a utility cryptocurrency that operates as a payment method for the fees associated with trading on the Binance Exchange. It is the third-largest cryptocurrency by market capitalization. Those who use the token as a means of payment for the exchange can trade at a discount.
Binance Coin’s blockchain is also the platform on which Binance’s decentralized exchange operates. The Binance Exchange was founded by Changpeng Zhao and is one of the most widely used exchanges in the world based on trading volumes.
Binance Coin was initially an
ERC-20 token that operated on the Ethereum blockchain. It eventually launched a mainnet and uses a PoS consensus model. On July 22, 2023, Binance Coin had a $37.3 billion market capitalization, with one BNB valued at around $242.55.
5. USD Coin (USDC)
Another stablecoin, USD Coin, also pegs its price to the U.S. dollar using fiat-collateralized reserves, which means it holds an amount of fiat currency equal to the amount of USD Coin in circulation. USD Coin was launched in 2018 by the Centre Consortium, which consists of Circle and Coinbase. Because Circle is based in the U.S., it is subject to regulation, making USDC a regulated stablecoin.
As of July 22, 2023, USD Coin had a market cap of $30.8 billion and a price per coin of $0.9999.
6. Cardano (ADA)
Cardano (ADA) is an “Ouroboros proof-of-stake” cryptocurrency created with a research-based approach by engineers, mathematicians, and cryptography experts. The project was co-founded by Charles Hoskinson, one of the five initial founding members of Ethereum. After disagreeing with the direction that Ethereum was taking, he left and later helped to create Cardano.
The team behind Cardano created its blockchain through extensive experimentation and peer-reviewed research. The researchers behind the project have written more than 120 papers on blockchain technology across various topics. This research is the backbone of Cardano.
Due to this rigorous process, Cardano stands out among its PoS peers and other prominent cryptocurrencies. Cardano has also been dubbed an “Ethereum killer” because its blockchain is said to be capable of more. That said, Cardano is still in its early stages, with a long way to go regarding DeFi applications.
Cardano aims to be the world’s financial operating system by establishing DeFi products similar to Ethereum’s. It hopes to provide solutions for chain interoperability, voter fraud, and legal contract tracing, among other things. On July 22, 2023, Cardano had the seventh-largest market capitalization at $10.9 billion, and one ADA traded for around $0.31.
7. Solana (SOL)
Founded in 2017, Solana is a
blockchain platform designed to support decentralized applications (dApps). Also referred to as an ‘Ethereum killer,’ Solana performs many more transactions per second than Ethereum. Additionally, it charges lower transaction fees than Ethereum.
Solana and Ethereum can utilize
smart contracts, which are essential for running cutting-edge applications, including decentralized finance (DeFi) and non-fungible tokens (NFTs).
The cryptocurrency running on the Solana blockchain is called Solana (
SOL). Since its inception, its price has risen tremendously. Solana had a market capitalization of $8.4 billion and was valued at around $21 on July 22, 2023, making it the eighth-largest cryptocurrency by market cap.
8. Dogecoin (DOGE)
Dogecoin (DOGE), seen by some as the original “memecoin,” caused a stir in 2021 as its price skyrocketed. The coin, which uses an image of the Shiba Inu as its avatar, is accepted as a form of payment by some major companies.
Dogecoin was created by two software engineers, Billy Markus and Jackson Palmer, in 2013. Markus and Palmer reportedly created the coin as a joke, commenting on the wild speculation of the cryptocurrency market.
As of July 22, 2023, Dogecoin’s market capitalization was $ 9.9 billion, and one DOGE was valued at around $0.07, making it the ninth-largest cryptocurrency.
9. Tron (TRX)
The TRON Foundation launched in 2017 to provide digital content makers full ownership rights through tokenization and dApps. The thought behind TRX’s launch was to give developers a way to create dApps. In 2018, TRON purchased BitTorrent, a popular file-sharing program, and integrated it into the TRON blockchain.
TRON’s native token, TRX, is used to pay for on-chain transactions and as a payment method on exchanges. Anyone holding TRX can apply to become a Super Representative, someone with the authority and obligation to validate transactions and create new blocks for the blockchain. The cryptocurrency’s consensus mechanism is a tweaked version of Ethereum’s proof-of-stake called designated proof-of-stake (DPoS), where the network votes in the super reps.
On July 22, 2023, TRX had a value of $0.085 and a market cap of $7.64 billion.
10. Polygon (MATIC)
Polygon (MATIC) was initially developed as a layer-2 solution to address the issues with Ethereum network congestion and traffic. Recent innovations have allowed it to become a multi-chain system where blockchains can work together using Ethereum’s virtual machine.
Polygon uses three layers: Ethereum, Heimdall, and Bor. Bor is a block-producing layer that compiles transactions into blocks and creates a periodic snapshot of the blockchain. The validators on the Bor layer are called block producers. The blocks from the producers are aggregated by the Heimdall layer, which validates all of the blocks created since the Bor layer’s last snapshot. It then creates a Merkle tree and publishes the Merkle root to the Ethereum mainnet.
Polygon hosts smart contracts, dApps, NFTS, and has several other solutions for developers to choose from.
On July 22, 2023, MATIC traded at $0.76 and had a market cap of $7.09 billion.
Honorable Mentions
We were only able to list 10 altcoins above, but there are many other important cryptocurrencies out there, and they jockey for position over time in terms of user bases, market value, and influence. Some other important cryptocurrencies include (as of July 2023) but are not limited to:
editorial policy.
Ethereum. “
Decentralized Finance.”
Storj. “
How it Works.”
Ethereum. “
What Is Ethereum?”
Ethereum.org. “
The Merge.”
CoinMarketCap. “
Today’s Cryptocurrency Prices By Market Cap.”
Bitfinex. “
What Is Tether?”
CoinMarketCap. “
Today’s Cryptocurrency Prices by Market Cap.”
CoinMarketCap. “
Binance Coin: BNB.”
Centre. “
Whitepaper,” Page 15.
Centre. “
Introducing USD Coin.”
Tron. “
Tron Whitepaper,” Pages 1, 30.
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