The heart of Bitcoin is the blockchain concept. Blockchains make certain that the difficult work of security is carried out by every user of the system, therefore rendering it incredibly difficult for malefactors to commit fraud and theft.
The many altcoins and cryptocurrencies that have grown up in the wake of Bitcoin all use the blockchain concept in some variation, although they generally have their own takes on it that are completely separate from BTC. Therefore the blockchain concept at the heart of Bitcoin has been shown to be quite sound.
It is difficult to imagine the circumstances that could destroy the value of Bitcoin, with its massive head start in name recognition and market capitalization, yet leave the remainder of the al coins functioning. It stands to reason that Bitcoin will be the gold standard of cryptocurrency for the foreseeable future. However, it is possible that Bitcoin will be found, for some reason as yet unknown, to be insufficient for the uses of the future.
3 Major Problems with Bitcoin
The three major issues with Bitcoin that are currently known to us are
- the low number of transactions possible per minute,
- the high amount of electrical energy needed for mining, and
- the possibility that some entity may find a previously unsuspected exploit and game the system.
[Also Read: 6 Dangers Ahead for Bitcoin]
If Bitcoin is to step aside for anyone, here are the cryptocurrencies most likely to supplant it.
7 Altcoins That Can Replace Bitcoin as Mainstream Cryptocurrency
Ripple has been substantially funded by large banks and people with close connections to regulatory entities, which means that it is both more stable and less transparent. Unlike Bitcoin, which maintains security by including a record of every transaction in every existing copy of the blockchain, Ripple maintains a ledger-like system that allows for much greater customer privacy. This simultaneously makes the coin more vulnerable to misuse and more valuable to large economic entities. Ripple is also optimized for modern commerce, with infinitesimally small transaction fees and vastly faster transaction processing times than Bitcoin, Ethereum, or any other cryptocurrency. It even matches the speed of many credit cards.
Ripple is an entirely premined currency, with a set number of Ripple tokens in existence and no possibility of more to be created. 62% of all coins are held by the consortium that designed Ripple, a complex international corporation founded by more than seventy banks and large financial organizations. As is a common theme with Ripple, this both decreases transparency and increases utility. If the non-circulating bulk of Ripple is discounted from the statistics, then there are those who will say that it already outperforms Bitcoin per unit. Due to its utility and the financial heft of the organizations behind it, Ripple is a fairly safe bet. If Bitcoin were to collapse today, Ripple would be ready to take over the market.
This coin has the advantages of faster transaction speed, high-powered investment, and an extremely committed development team. They also hold a novel view of the blockchain concept that changes their focus from direct commoditization to the maintenance of contracts.
Although this detail may seem to be arcane and technical, it certainly qualifies as a radical approach to the root causes of monetization.
The Ethereum development team is adamant that they are not a cryptocurrency, and that the ETH coin is only a byproduct of their project, but they are certainly similar enough to all the other cryptocurrencies for the purposes of investment and financial activity. The developers in Ethereum are closely connected to financial and governmental entities in Russia, and that country’s burgeoning interest in crypto has been reflected in its market capitalization.
Ethereum with one of the largest market shares, and they are generally considered to be the best guess to eventually match Bitcoin.
Bitcoin Cash is still relatively new to the crypto scene. It was introduced in August 2017 when the Bitcoin blockchain split into two. Bitcoin scalability was one of the driving forces behind the move, among other factors at play.
The most significant difference between Bitcoin and Bitcoin Cash is the size of the block size. When looking at the Bitcoin blockchain, each of the blocks has a maximum capacity of 1 megabyte. Bitcoin cash has a maximum size of 8 megabytes. What’s the big deal though? Why does it matter?
The size difference in the block size allows for more transactions processing. Bitcoin Cash provides for 7,000 transaction processing in just one block. Bitcoin gets a cap at around 2,500 transactions per block. Getting back to the scalability, as the popularity of the cryptocurrency continues to expand, Bitcoin Cash is better suited to handle more mass adoption.
The most prominent hurdle Bitcoin Cash has to face is the infrastructure. Wallets, payment services, as well as other remittance platforms fail to support Bitcoin Cash at the moment. Bit Cash is simply not that useful, yet. It can be bought, sold on all of the exchanges. That is about where it ends, though, value-wise.
Bitcoin Cash can handle a larger transaction volume, giving it a chance in the scalability department if it wants to dethrone Bitcoin. More mass adoption in the form of being able to use the cryptocurrency in real-world scenarios is needed though to leap.
IOTA is a fairly new cryptocoin that has been catching a lot of attention in recent months. With a market capitalization of more than two million dollars, it is a respectable entry in the cryptocurrency field.
What sets it apart from other coins is its use of something called the Tangle, a blockchain derivative that attempts to improve security and transaction speed by utilizing underappreciated computer resources in the area. IOTA eschews mining and processing fees, leading to the fast and economical exchange of funds. However, the system’s stated Reliance on the IoT, or Internet of Things, strikes most computer security aficionados as something between audacious and astoundingly risky. The very nature of the IoT network is determined by the un-update ability of most of such processors.
Most IoT nodes, from small computers to the proverbial thermostat, utilize hard-wired technology that was never intended to be updated. This means that security with IoT is in a disastrous state. Even if a security vulnerability is found, it cannot be repaired, as the items containing the exploit have been sold and purchased by the end users.
This massive amount of computational power that is sitting unused is inspirational to many people involved in the computer field. However, as a basis for a secure currency, its utility remains to be seen. The IOTA development team claims that their cryptocurrency functions as more than just a commodity, and will actually provide linking systems for the emergent IoT network. Although this would be a great achievement to any team that could do it, the experience with namecoin and other such ambitious blockchain-based products teaches the consumer to be careful.
Unless the Tangle truly has solved a fundamental problem of modern computer security, there is little possibility that IOTA will replace Bitcoin in market capitalization. However, it does appear to be a project worthy of attention and investment.
Litecoin has been around for a bit now, launching back in 2011. It is the “silver” to Bitcoin, which is seen as “gold” in the cryptocurrency space. Litecoin still is severely undervalued compared to Bitcoin by experts. It has many benefits, differences to Bitcoin that give it a chance to dethrone the leader in the market.
The biggest difference between Bitcoin and Litecoin is the limit. Bitcoin has a cap of 21 million coins. Once mining is complete, the cap will remain at that point. Litecoin has a much larger cap, with a coin limit of 84 million. Market cap also has to be taken into account. Litecoin was introduced with the largest market cap of any cryptocurrency in the space.
Block transaction processing is also superior with Litecoin. The ability to mien a block with Litecoin can be done in 2.5 minutes, while 10 minutes is the mean block time for Bitcoin. Miners also have to take note with Litecoin due to the differences in proof of work, the algorithm. Bitcoin uses a hashing algorithm known as SHA-256. Litecoin uses a scrypt algorithm.
How about transaction processing time? Simply put, Litecoin is just faster! Litecoin can handle a much higher volume of transactions at once than Bitcoin. The speedier block generation we already mentioned plays a prominent role in this. Bitcoin needs to be upgraded at its code-base to get anywhere near what Litecoin can accomplish. You can make transactions and have them confirmed faster with Litecoin. It is considered to take about half of the time for a transaction confirmation with Litecoin compared to Bitcoin.
Litecoin has made its mark as the “silver” to the Bitcoin “gold.” It’s value is seen positively in the market as it continues to gain on the leader.
Neo Coin is an open source-based cryptocoin with the backing of the Chinese banking system. Neo is viewed more as a commodity than a currency, and it actually has a separate cryptocurrency attached to it. This currency, known as the GAS coin, is consumed in transaction fees, leaving the neocoins untouched in their wallet. Neocoins are also not mined.
“Mining” Neocoins means verifying the transactions of others, which gives the “miner” a percentage of the transaction fees paid in GAS coins.
This two-tier system allows the community verification process of “mining” to take place without the loss in security or fungible value of the base cryptocurrency.
Neocoin has had a dramatic year, causing some to predict great things while others question the foundation of the project.
Dash is a relative newcomer to the cryptocurrency space, and aims to solve many of the problems that Bitcoin currently faces. It was initially launched in January of 2015 and is formerly known as both Coin and DarkCoin.
The goal of Dash is to create a blockchain that is superior to Bitcoin, which erased many of its weaknesses. The intent was for it to be self-funded, self-governed once it was out in the open world. The payments run on a network of Masternodes. Those who operate the Masternodes invest in Dash and get payment for block mining.
Utilizing the Masternode set-up, the Dash cryptocurrency has two features that are known as InstantSend and PrivateSend. The infrastructure of Bitcoin lacks the features here. The InstantSend feature allows for transactions to be sent and confirmed in seconds, compared to 10-minutes on Bitcoin. PrivateSend provides for users to opt for full privacy in transactions. Bitcoin allows for user tracking.
Dash is making moves in the cryptocurrency space, despite starting out five-years after Bitcoin was initially unleashed. With estimated max total coins at around 19 million, these may end up even being rarer than Bitcoin, at a max of 21 million. Dash is here to stay and has some differences and features that make it stand out positively. No one would be surprised if it is in the top 5 in crypto currencies in a year’s time.
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