by Luca Rondon Andrade
Bitcoin this, Bitcoin that… After all, is the world of cryptocurrencies all about Bitcoin? Today we will talk about the other part of cryptocurrencies. At its peak dominance (early 2013), Bitcoin represented more than 90% of the market capitalization of all cryptocurrencies. This situation remained pretty much unchanged until late 2014 when some different coins began to appreciate in value. Nowadays, the situation is quite different and since early 2017 the share of Bitcoin capitalisation out of the total market cap is decreasing. The importance of coins other than bitcoin are starting to gain traction, so much so that in June 2017, Ethereum 31,5% had while Bitcoin had around 33% of the market capitalisation.
The term used to define coins other than Bitcoin is “altcoins”, mainly because they represent an alternative to bitcoin. First things first: there are many reasons for the existence of more than one different coin. Each one has has different applications, problems and future prospects. Hence, it is highly advisable that you keep an eye on them as they aim to have different characteristics and perform different tasks.
The top 6 altcoins by market cap are:
3. Bitcoin Cash
Ethereum and Ripple have already been discussed in detail in other articles of ours, you can check them out here and here. Stellar will also be discussed in its own future article, so you can stay tuned for its detailed overview!
3. Bitcoin Cash
One of the main advantages (and disadvantages) of the decentralized blockchains is the fact that they’re decentralised. Have you ever heard about how much faster decision making can be in authoritarian governments? The same applies to blockchains. In August 2017, when the bitcoin community could not agree on how to solve the blockchains problems, something happened: a hard fork. The hard fork led to the creation of a new cryptocurrency with bigger block size.
While hard forks allow the community to get rid of some bottlenecks caused by its design, it also adds an element of uncertainty. After all, you wouldn’t want the Fed saying that the dollars you have in your bank account are no longer good, right?
EOS has been nicknamed the ‘ethereum killer’ as it aims to solve some of ETH’s problems. It was created with the intent of being the main cryptocurrency used with DAPPs in order to execute smart contracts.
Its main difference with Ethereum is its scalability possibilities and and the difference of who foots the bill for transaction costs. In Ethereum, the user pays for transaction costs and in EOS, creator of the DAPP does so.
Litecoin was designed to solve Bitcoins’s scalability and cost problems. Created by Charlie Lee, a former Google Engineer, its design clearly shows that it is supposed to function as a small transaction coin, not as a store of massive quantities of value. Maybe in a few years we’ll all be paying for our coffees with Litecoin and storing our wealth in Bitcoin? Who knows.
What does the future hold?
The future of cryptocurrencies is bright. In the following decade, one should expect large multinationals and governments to release their own versions of cryptocurrencies, who will each have their own function and “personality”. JP Morgan is the first major bank to introduce a cryptocurrency and you should expect other corporations to do so too.
As the Bitcoin bubble already brought in a ton of capital to small and (sometimes) unrealistic projects, the future without the ‘hype’ should be more stable, with coins that offer clear and concise utilities to their users. We should expect more and more projects to come out from “trustworthy” sources, possibly leading to widespread utilization of cryptocurrencies as a part of our daily lives.