Bitcoin is the elder stateman of cryptocurrencies. Numero uno is a crowded field, that which lit the path to wider adoption. However, it also has a lot of drawbacks like slow transaction load, long processing times, and high fees. Since its launch, a host of new cryptocurrencies have sprung up in the fertile field that Bitcoin has prepared. Here’s a quick look at three that could unseat the King of Cryptos.
Ethereum, ETH, was made as a serious alternative to Bitcoin. Bitcoin is founded on proof-of-work which requires the solving of very complex calculations to mine coins and confirm transactions. Ethereum is moving to on proof-of-stake which is far faster and doesn’t include mining. Essentially, those who have around 1000 Ether could become stakers or minters. The amount of Ether staked will determine the annual dividend paid back to the staker based on transaction fees.
This will increase the speed of Ethereum transactions. It will also make Ethereum easier to scale and help with mainstream adoption. The Casper upgrade, which will bring proof-of-stake, will also lower security maintenance costs and reduce energy consumption by erasing mining. When this will get implemented is still to be determined.
Litecoin, LTC, was built to be different than Bitcoin, the silver to its gold. Where Bitcoin takes 10 minutes or more to confirm a block, Litecoin can do it in 2.5 minutes. That means faster processing, lower transaction fees. Fees on Bitcoin transactions ranged from $5 to $55 while Litecoin is around $0.30. Litecoin also is starting to get a lot of transaction by being adopted into legacy payment solutions. That means it will be an acceptable payment method at retail outlets for small ticket items.
Bitcoin Cash, BCH or BCC, comes from a hard fork in the Bitcoin blockchain. A hard fork is a major protocol update that includes new rules and essentially creates an upgraded blockchain path. It increased the size of a block to 8MB for quicker verification and it has an adjustable difficulty. The goal of Bitcoin Cash is to make it a viable option for day-to-day transactions in the real world.
Other contenders include Monero, XMR, based on the CryptoNote algorithm. It too has faster transaction times than Bitcoin. It’s ASIC mining resistant meaning it’s not easily mined by companies. This helps keep it decentralized.
IOTA, the Internet of Things Application cryptocurrency is yet another contender. It uses a protocol called Tangle which requires those who want to execute transactions to also be active in the network and verify the two previous transactions. This gives it the ability to have free transactions. There is no mining as all tokens were made at its creation.
Finally, there’s Cardano, ADA, which started in 2017 making it then newest of the contenders. It’s thought of as a 3rd generation cryptocurrency, and was created by one of the co-founders of Ethereum. It is based on proof-of-stake and has a layered architecture for improved security. It is guided by academic institutions and seeks to address the shortcomings of the previous generations.
Will any of these be able to unseat Bitcoin? Will they become better options for daily transactions? 2018 looks like it could be the year of the crypto and we could find the answer to these questions as we move forward into a truly digital economy.