Believe it or not, there are other cryptocurrencies besides Bitcoin.
When it comes to cryptocurrency, Bitcoin has certainly been the trendsetter. Its name has actually become synonymous with the crypto coin world – to the point that Bitcoin is often used interchangeably with cryptocurrencies. It has become like the ‘Vaseline’ in the petroleum jelly market.
Discovering some new cryptocurrencies
The good news is that there are many others out there besides Bitcoin. In fact, there are thousands out there. But today, let’s look at the primary alternate crypto coins that are available for investing your crypto dollars.
Litecoin was one of the earlier altcoins as it was launched in 2011. It quickly became known as the ‘silver to Bitcoin’s gold.”
It was created by an MIT graduate named Charlie Lee, a former engineer with Google. Litecoin is structured as an open-source payment network that can be used globally. And it isn’t controlled by a central authority, as it utilizes ‘scrypt’ as validation of all work.
Even though Litecoin is quite similar to Bitcoin in several ways, it has a much faster block generation rate in its blockchain, which confirms transactions much faster.
As time goes on, more and more merchants are accepting the use of Litecoin. In January 2021, it had a market cap of around $10 billion, and its price per token was about $154 – making it the sixth-largest cryptocurrency in the world.
Ethereum has by far made the biggest splash as a Bitcoin alternative as its objective was to go beyond the functionally of a cryptocurrency. It features a decentralized software platform that allows Smart Contracts and Decentralized Applications (DApps) to be constructed and operated with no downtime, without any fraud or needless interference from any third parties.
The primary goal of Ethereum is to develop a decentralized set of financial products that any person throughout the world could access – regardless of ethnicity, nationality, or faith. Their key target was to provide financial services to those living in nations without any state infrastructure.
Ethereum’s apps use its native cryptographic token, which is called ether. Ether can be thought of as a vehicle that moves around the Ethereum platform and is used by primarily developers who want to create applications inside Ethereum.
The Ether cryptocurrency was launched in 2015 and has become the second-largest digital currency behind Bitcoin. However, it lags Bitcoin by a large margin as it was about 19% of Bitcoin’s market cap in January 2021. At that time, its market cap was $138 billion and was priced at around $1219 per token.
When Tether was launched in 2014, it became the first of a group that is called stablecoins. These are cryptocurrencies that seek to link their market value to an outside currency or some other external reference point in an attempt to minimize volatility.
Since just about all digital currencies have undergone extreme volatility at seemingly random times, the creators of Tether, and other stablecoins, wished to calm down price fluctuations. This would attract more of those investors that were averse to risk. One trademark of this group of altcoins is that they make transfers easier from cryptocurrencies to common currencies like US dollars.
As of January 2021, Tether was the third-largest of cryptocurrencies. It had a market cap of $24 billion along with a per-token value of $1.00.
Polkadot is an incredibly unique cryptocurrency whose objective is to deliver interoperability among other blockchains. Thus, it has a protocol that connects both permissioned and permissionless blockchains and allows various systems to work in unison under one roof.
The core component of Polkadot is the unique relay chain it offers, which will allow different networks to link together. It creates a ‘parachain,’ which is a parallel blockchain to interact with its native tokens in specific applications.
It differs from Ethereum in that it doesn’t just create decentralized applications on Polkadot; developers are permitted to create their own blockchains while simultaneously using the security of Polkadot’s blockchain.
With Ethereum, developers can develop their own blockchain, but they have to set up their own security scheme. This often will leave smaller and new projects vulnerable to attack – because larger blockchains have more natural security. This concept offered by Polkadot is called a shared security.
Polkadot was created by one of the core founders of the Ethereum project named Gavin Wood. In January 2021, Polkadot had a market capitalization of $11 billion, and one DOT traded at $12.54.
Cardano is a cryptocurrency that was created for researchers. It is mainly used by mathematicians, engineers, and cryptography gurus. This altcoin was co-founded by Charles Hoskinson, who was also a founding member of the Ethereum project.
The research behind Cardano developed its blockchain through extensive testing and peer reviews. The founders who created this project authored over 90 papers about blockchain technology that covered a vast array of topics. This research became the foundation for Cardano.
Because of the rigorous testing process initiated by the founders, Cardano has proven to be a stand-out in terms of proof-of-stake among other prominent cryptocurrencies. Some people refer to Cardano as the ‘Ethereum killer’ because its blockchain can do so much more.
But Cardano remains in the early stages of development. While it has bested Ethereum to the proof-of-stake consensus model, there is still much to be done regarding decentralized financial applications.
In January 2021, Cardano had a market cap of $9.8 billion and traded for $0.31 per token.
Chainlink is an altcoin that features a decentralized oracle network that serves to connect the gap between smart contracts and the data outside of them. A blockchain by itself lacks the capability of linking to external applications in a trusted and secure manner.
Chainlink’s ability is unique because allowing smart contracts to communicate with external data so they can be execute functions based on that data is something even Ethereum cannot do.
In addition, Chainlink can do many other things as well – according to its company blog.
For instance, it can monitor a water supply for pollutants and toxins or detect illegal siphoning taking place across certain cities. A bevy of sensors could monitor consumption, the status of water tables, and even levels from local bodies of water.
A Chainlink oracle would have the ability to both track this data and then feed it into smart contracts. The smart contract would then implement fines, release flood warnings to municipalities, or invoice clients for consuming too much of a community’s water based on the data received from the oracle.
Steve Ellis and Sergey Nazarov developed Chainlink. Chainlink’s market cap was $8.6 billion in January 2021, and a LINK is valued at $21.53.