Bitcoin has been in the spotlight for several years. In recent days, crypto money has been criticized by Elon Musk, who seems to be making the rounds on virtual currencies, because of its ecological impact. As a result, its value has fallen below $40,000 in recent weeks. Many other cryptocurrencies have emerged and are becoming more and more important in the world of finance. Business Cool introduces you to the 5 alternative cryptocurrencies to Bitcoin.
The cryptocurrency market is booming. It has indeed reached a significant size, with a valuation of $2 trillion. The valuation of all the crypto-currencies (of which there are 2,500) is equivalent to over 18% of the world’s gold reserves.
Bitcoin still remains at the top of these virtual currencies and alone accounts for half of this valuation with $1,128 billion, followed by Ethereum, whose founder became the youngest crypto-billionaire, at only 27 years old. However, the world of crypto-currencies remains very complex and difficult to pin down, as it is closely linked to new technologies and blockchains. Moreover, as these currencies are not regulated, the behavior of some tech giants, such as Elon Musk, can have catastrophic effects on their values.
Ethereum (ETH): a growing network, future of cryptocurrency
Ethereum (ETH) has emerged as the second most powerful cryptocurrency in terms of capitalization: 393 billion as of May 10, according to Coinmarketcap. This currency came into being in 2013. It was created by Vitalik Buterin, a Russian researcher and programmer. Ethereum has the advantage of introducing self-executing smart contracts, called “decentralized applications”. These are mini-programs capable of executing any function (mainly the issuance of new cryptographic tokens).
The purpose of these contracts is to set the rules of the contract and execute it automatically once the conditions are met. “The program runs the code and, if it automatically validates a condition, it determines whether the asset should be sent to one person or returned to another, whether it should be paid back immediately to the person who issued it, or a combination of all of these,” the founder detailed at a blockchain summit.
Ethereum is now becoming a solid and attractive cryptocurrency whose value is steadily increasing over time. However, it has one negative point, that of its limited transaction processing capabilities.
Ripple (XRP): an alternative to SWIFT for banks
Ripple (XRP) is a cryptocurrency for banks. It was designed to meet the needs of sending payment orders to these institutions and thus offer a faster and more efficient alternative to the SWIFT network. The latter being slower, it requires a one-day lag between sending and receiving funds, while Ripple takes only a few seconds.
Much more than a cryptocurrency, it acts as a bridge and allows international payments to be made very quickly and cheaply. These advantages are mainly of interest to banks, such as UBS, American Express which have adopted this technology.
Litecoin (LTC): the oldest alternative
Litecoin (LTC) was born in 2011. Created by Charlie Lee, a former Google employee, it is one of the very first cryptocurrencies competing with Bitcoin. It works in the same way as the star virtual currency and is based on the same source code. However, it was developed to counter the problems of slow transaction speed and complement Bitcoin’s value storage status with faster and cheaper transactions.
Over the years, it has established itself in this very competitive world and proven the security of its transactions. Many merchants now accept it as payment.
EOS: a limited scope of application
The EOS cryptocurrency is the direct competitor of Ethereum. Its primary objective is to develop decentralized applications and to simplify the technology as much as possible. Its primary qualities are its ease of use and free transactions. Its popularity goes back to the fact that it raised $4 billion in funds in 2018. Its scope of activity is limited to video games and gambling, but the cryptocurrency still has big ambitions and intends to expand into other markets.
Bitcoin Cash (BCH): the cryptocurrency that grew out of Bitcoin
Bitcoin Cash (BCH) is a cryptocurrency spun off from Bitcoin and created after a hard fork in 2017. It is currently the fifth-largest virtual currency according to Coinmarketcap. Its goal was to increase the number of transactions that could be managed. Today, it indeed offers many advantages:
- multiple future developments;
- fast transaction processing (116 transactions per second);
- excellent results from the network stress test, which supported more than 700,000 successful transactions in 24 hours.
The BCH is compatible with many wallets and mobilizes a large and dynamic community that over the years has grown away from Bitcoin. It also ensures its development and promotion on a global scale.
Since its launch in 2017, BCH has become one of the offshoots of Bitcoin recording phenomenal success. Roger Ver, a well-known investor who followed the evolution of Bitcoin in its early days, is one of the advocates of Bitcoin Cash and has described it as the “real Bitcoin.”
