A comparative analysis of Bitcoin and altcoins
Today, cryptocurrency has become a household term with almost everyone, if not investing in it at least having a fair idea of what it is. This was not the case, however, in 2009, when Satoshi Nakamoto brought forward his idea. There was a need for an alternative to the centralized financial system and so Bitcoin was introduced, Register Now. This novel concept of digital money has over the years inspired thousands of developers to create new coins. Today, there are over 15,000 active cryptocurrencies. All these crypto coins are collectively termed altcoins, meaning an alternative to Bitcoin. Among them, several altcoins have firmly established themselves in the crypto market but no altcoin including Ethereum has been able to match the success and popularity achieved by Bitcoin.
Things you need to know about Bitcoins
Bitcoin is the pioneer of cryptocurrency and has paved the way for other coins to be introduced. It did not manage to create an impact on the masses during the initial years of its introduction to the trade market due to the fact that it was a digital currency on most folks did not want to believe in. However, it managed to stick to the market despite its high volatility factor and now it ranks first among all the cryptocurrencies present in the market. Proponents of this concept though believed that Bitcoin indeed was the alternative to fiat currency and with proper usage could revolutionize the global economy.
2017 was the benchmark year for Bitcoin. It witnessed a meteoric rise in its price from $1,000 to $20,000. It was when people sat up and took note of this currency. Though the price did go down eventually the curiosity of the people was piqued and the turnabout in Bitcoin’s fortune started. The cryptocurrency since then has gone through umpteen highs and lows including the low phase it has been experiencing in 2022 after the historic high in November 2021 when it reached its highest ever value of $64,000. The easy accessibility of Bitcoin also helped in increasing its popularity among first-time investors. Several exchanges and trading apps offer an opening for Bitcoin trading. One such app is which helps investors make the right choices that lead to profitable trading sessions for the users.
Bitcoin has successfully managed to stave off the growing competition. Each coin wants to match the success of Bitcoin but to date, no coin has been able to reach anywhere near the kind of popularity Bitcoin enjoys among its users. For most, cryptocurrency is Bitcoin and vice versa. With a market cap of above $400 billion, and its increasing acceptance among governments, banks, and businesses, big and small, it is reasonable enough for Bitcoin users to be optimistic about its future despite the new competition it faces almost every day. With more than 100 million Bitcoin users and the number expected to rise manifold, the potential and prospects of Bitcoin continue to remain bright.
Altcoins are typically developed in response to the drawbacks that one finds in the blockchain that they have based themselves upon. They fork from the original chain to create a new blockchain with the required modifications that the developer deems fit to add to increase its efficiency and usage. For example, just 2 years after the introduction of Bitcoin, Litecoin was launched. It forked from the Bitcoin blockchain and was introduced with changes in its proof-of-work consensus mechanism. Bitcoin uses SHA-256 PoW while Litecoin was created with a modified consensus mechanism called Scrypt. It not only is faster but also consumes less energy.
Though altcoins are the better versions of the original coin, due to a smaller investment market and less liquidity, only a handful of altcoins have managed to create an impact in the crypto market. Many are scams too, so when investing in altcoins, one must consider researching the credibility of the coin and its developer. Too many altcoins with similar features also work against them as users are confused.
Altcoins can be classified as the following tokens:
There are several altcoins that enjoy a substantial market cap and have been successful. The top 10 altcoins are:
- USD Coin
- Binance Coin
- Binance USD
With altcoins, a crypto trader has an opportunity to diversify his investments thus mitigating potential risks that one associates with the crypto market. Bitcoin may continue to dominate the crypto scene but several altcoins with their better and more varied features add a wider range of options to choose from.