Alternative coins to bitcoin

People have regained their trust in crypto and are seeking to buy bitcoin with credit card to participate in the financial revolution. Investors are often looking at alternate cryptocurrencies to make considerable profits by trading in and out of them. However, aspiring traders and investors should always be aware that the market heavily depends on one cryptocurrency — Bitcoin.

In this article, we will explain why Bitcoin has so much influence on other cryptos. To achieve this we explore its basics and some major events that helped it reach a value over 1 trillion dollars in just over a decade.

What is Bitcoin? Bitcoin was launched way back in , by the mysterious Satoshi Nakamoto. To this day, the identity of its creator remains unknown. Nakomoto created Bitcoin with the purpose to provide humanity with a universal digital currency, where users could exchange value without the need of any intermediary. He considered our current financial system to be doomed to fail, mainly because of its dependency on governments and central banks. His answer was Bitcoin, a peer-to-peer digital currency with a limited supply, that would provide a hedge against inflation and open the internet economy to anyone on the globe.

Thanks to this vision, the niche project with just a dozen of miners and users has evolved into a trillion-dollar financial system that spawned an entire industry. Bitcoin revolutionized finances, providing an alternative away from banks and governments. The opposite is equally true — when the price of bitcoin rallies, we expect altcoins to go up in price shortly after. But why does this happen? What makes Bitcoin so important that an entire industry follows it so closely?

If we made the parallel to stock markets, it would be ludicrous to think that all of the Nasdaq would crash just because of Microsoft stocks, for instance. However, this has also allowed the original cryptocurrency to cement itself as a sure store of value, increasing its popularity to astronomical levels.

If Ethereum continues to provide the best security for high value applications, you shouldn't be surprised if demand for Ether rises as well. BZ Pro Tip: Some applications benefit greatly from the immutability of decentralized blockchains like Ethereum like the Uniswap example above.

While other applications have little to gain from going on-chain. Many projects use blockchain and cryptocurrency only to capitalize on the hype. Chainlink LINK Chainlink aims to provide valuable real-world data to smart contracts on Ethereum and other blockchains. This could result in thousands or millions of new blockchain applications made possible by the use of Chainlink's data. While bringing real world data to the blockchain may seem trivial at first, the goal of Chainlink is to provide trustworthy data without the need to trust anyone, otherwise, there's no difference from web2.

An oracle is a fancy term for a source of trustworthy information — a calculator is a math oracle. The trick is sourcing the data in a decentralized manner, and the reason that Chainlink needs to use blockchain tech. In short, Chainlink allows for many entities to give an answer to 1 question, and returns the answer provided by the majority of responders. Those who respond correctly are paid. Any who respond maliciously will be penalized from their stake.

These rules are hard-coded in to the protocol, and allow for Chainlink to work at scale. Many legacy applications like insurance and real estate funding could benefit from on-chain execution. Currently, insurance is slow and manual, but payouts could be automated with smart contracts. Additionally, on-chain exchanges like Uniswap could benefit greatly from having trustworthy pricing information for off-chain assets like the US Dollar.

This could allow for users to change between fiat and crypto using only their Ethereum wallet address as their identity. In fact, Sushi began by copying and pasting Uniswap's entire codebase which is public on the blockchain. Since then, Sushi has launched a suite of DeFi products and applications like lending, farming and staking — all of which Uniswap has not done.

The story from Sushi's creation to where it is today is almost unbelievable. The projects original creator left without a trace — taking millions of dollars with them. They are also launching a decentralized NFT platform, which many hope will have less issues than OpenSea. While there is still some controversy surrounding Sushi's core team including a leader who recently left on bad terms the project is certainly one to keep an eye on in Sushi is not the target of any investigations right now, but this risk cannot be taken lightly.

Luckily, thanks to Ethereum's decentralization, the SEC cannot stop either of the exchange protocols from running. Stellar has a prime opportunity to seize the moment and take its best shot at becoming the global payment network. Polygon is a layer-2 solution for Ethereum, meaning that Polygon leverages Ethereum's applications and security on a separate network that can be added to your Ethereum wallet.

Numerous large exchanges have already introduced support for integration with Polygon. For example, FTX announced Polygon adoption in January of this year and Coinbase also has plans for Polygon integration that are likely to come to market in Until now, a majority of NFTs are minted on the Ethereum blockchain but with rising transaction fees users are looking to more sustainable networks to transact on. Polygon offers just that as transacting NFTs is much cheaper on the Polygon network thanks to its layer 2 architecture.

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Although lumens are the token of the stellar network, they are not typically part of the currency exchange transactions. Their main use is in securing the network , but they are sometimes used as a bridge between less common currency pairs.

NEO NEO, originally called antshares, is a relatively new player in the market, having been founded in In this sense, technological resources can be traded in transactions involving no fees. As such, it should enable transactions to occur that are currently prohibited by the barrier of fees, such as microtransactions involving very small amounts.

The IOTA technology is still in its beta stage , but tokens can still be purchased on many exchanges. Dash Dash was launched in and is known for its fast transaction speeds. While bitcoin transactions take ten minutes, dash transactions take just four seconds. Another notable thing about this altcoin is the way decisions are made within the network.

Bitcoin has a unanimous rule, whereas dash uses a voting system so that big changes can be made quickly. PrivateSend is a privacy initiative that offers improved anonymity by mixing your coins with those of others. InstantSend, as its name suggests, enables near-instantaneous transactions.

For spending, not many retailers accept dash directly, but it can be used through many payment networks and debit cards, such as SpectroCoin. This network is based on traditional blockchain technology with a new block being mined every two minutes. One celebrated difference of monero is that, unlike bitcoin, it is fungible. In addition, fungibility offers more anonymity to transaction participants.

Indeed, some reports have linked monero to the WannaCry ransomware attack. Other than improved privacy, monero addresses some of the usability issues inherent with bitcoin by utilizing penalties for excess block sizes. Monero can easily be traded for other cryptocurrencies like bitcoin on exchanges but cannot be paid for directly with fiat currencies. ZCash ZCash claims to offer a more secure alternative to bitcoin. Instead of identities and amounts, the ledger only shows that a transaction took place.

Although ZCash seems to have promise, there is skepticism among the crypto community about the strength of its underlying protocol. It was named after a meme featuring a Japanese dog doge. Of course, one of the huge hurdles and indeed validators for any cryptocurrency is their widespread adoption. Proponents claim dogecoin is well-equipped to take on this challenge with its hip, fun image.

This network uses the PoW model and Scrypt hashing algorithm. The coin production schedule of dogecoin is much faster than that of bitcoins with billion coins being released by Dogecoin is far less accessible than bitcoin but is available on some exchanges.

Some will carry more weight than others depending on how you plan to use altcoins, for example, everyday spending or a potential long-term investment. Transaction speed A common selling feature of altcoins is the speed with which transactions can be completed.

For example, a bitcoin transaction should typically take around 10 minutes, the time it takes to mine a block. Although, it can take a lot longer with a couple of factors at play. One is the transaction fee. Miners, who are paid the transaction fee, actually have a choice as to whether to include a particular transaction in a block.

This means that the amount of the fee could determine whether it is included or not. If the fee is too low, the transaction could take days to be confirmed, or even just end up getting stuck. Another factor that can slow down some bitcoin transactions is the number of confirmations required. Each block added thereafter is considered an additional confirmation of that transaction. Typically, the higher the transaction amount, the more confirmations required.

Some merchants may stipulate more confirmations before a transaction is considered complete. BuyBitcoinWorldwide offers this general guide to the number of confirmations typically required. An institution may require three subsequent blocks be added on top of the block your transaction is in.

If a block is added every ten minutes, instead of taking the ten minutes it takes to add your block, it will take 30 minutes 3 blocks x 10 minutes before your transaction is confirmed. One of the major goals of some altcoins is to reduce these transaction times and avoid lengthy delays.

For example, litecoin blocks are mined about four times faster than bitcoin blocks. This is already a significant improvement, but it becomes increasingly so as more confirmations are required. However, it can sometimes be difficult to get your hands on certain coins. If you want something that is easy to buy and sell on multiple platforms, you might have to go for one of the more established altcoins like bitcoin cash, ethereum, or litecoin. Bitcoin is by far the most widely accepted cryptocurrency today, but it is actually seeing a decline in use.

Lengthy transaction times and high fees are reportedly to blame. This opens the door for altcoins to trump bitcoin in these areas and build their respective commercial applications. Indeed, it looks like litecoin is already well on its way to offering a mainstream and convenient payment method through the recently announced LitePay.

Cryptocurrency debit cards are nothing new and many offerings enable you to pay via bitcoin and other cryptocurrencies. This CoinMarketCap chart shows the jump in litecoin value after the February 14th Litepay announcement. While companies like BitPay are specific to bitcoin, others enable merchants to accept altcoins too. For example, popular coin exchange Coinbase offers a payment gateway.

Bear in mind that companies are popping up all the time that aim to make accepting and spending cryptocurrencies easier. At the same time, the prospect of increasing regulation from governments could limit these applications or shut them down altogether. Like many aspects of cryptocurrency, there really is just no telling exactly where things are headed in this regard. Blockchain system The system used to verify transactions and add them to the ledger is different for each coin.

To put it very simply, instead of miners competing to add blocks to the chain, PoS involves the selection of a block creator, known as a validator. They are chosen based on their stake in the network and are paid transaction fees but do not receive a block reward. Overall, PoS is a far more efficient method than PoW, requiring less energy input. It is arguably more secure although may have more potential to become centralized. Some complain that a flaw in the PoS model is that it facilitates the rich getting richer and the poor poorer.

As such, some of the main selling points of some altcoins are their increased security and privacy. Some of those boasting superior measures to bitcoin are monero and ZCash.

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