Bitcoin was introduced to the world in 2009 as a form of digital currency. Since its inception, the crypto coin has spawned numerous digital currencies, known collectively as Alt coins.
Traders in Bitcoin can make transactions using a public digital ledger known as a blockchain. This is a permanent record of all transactions and allows the digital asset to function under a decentralised payment system. Bitcoin, like many of its subsequent successors, is created by a crypto process known as mining. This involves using mining software to secure each block to an existing blockchain network. Once the block is verified by the software, it’s made available to all the users on the network. If a user manages to secure a block, then new units of the Bitcoin are released into the chain. Bitcoin, however, doesn’t have a limited supply. The cryptocurrency has a circulation limit of 84 million coins, and once these are all mined, there will be no more produced.
Unlike traditional money, cryptocurrencies, such as Bitcoin, are not controlled by a central authority and are therefore not considered to be legal tender in most of the world’s major economies. Bitcoin and its successors are flat currencies, meaning that they’re not backed up by any convertible resources, such as gold, making any regulation of them particularly challenging. Nonetheless, that hasn’t stopped interest in digital commodities, with more and more people considering investing in them. Moreover, many businesses are starting to recognise cryptocurrency and accept it as a method of payment.
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As of March 2022, there are tens of thousands of companies worldwide that accept cryptocurrency as a form of payment. Furthermore, many of them are major recognisable brands, such as Microsoft, PayPal, Etsy, Starbucks, and many more recognising Bitcoin as an acceptable method of transaction.
Trading in cryptocurrencies is similar to investing in other assets on the stock market in that you would buy the commodity expecting to sell it when its market value increases. While still a relatively new concept, trading in cryptocurrencies has boomed, with the market currently worth an estimated $3 trillion.
Bitcoin has experienced many ups and downs for investors and has shown to be a very volatile asset. However, many of the digital assets that it inspired seem to have been more lucrative for traders and are therefore emerging as rivals to the original cryptocurrency. If you’re thinking of trading in one of these alt coins, then check Bybit (https://learn.bybit.com/altcoins) information on how to invest. What are these alternative cryptocurrencies though and which ones are the biggest competitors to Bitcoin? Read on to find out.
Litecoin
Launched just two years after Bitcoin, when cryptocurrency was still in its infancy, Litecoin was created by former Google employee Charlie Lee. The asset was based on Bitcoin and therefore shares many similarities to its predecessor – such as the use of blockchain technology – but was created to be a cheaper alternative that’s more suited to everyday transactions. Mining Litecoin is a much faster process than mining Bitcoin, taking around two-and-a-half minutes, compared to the latter’s 10 minutes. Litecoin also has a higher market cap limit than its rival, with a supply of 84 million coins. The cryptocurrency has enjoyed a rise in its aggregate value since the end of 2013, hitting its highest ever market price in May 2021 at $410.26.
Dogecoin
Initially devised as a joke, Dogecoin has grown to become a major contender in the cryptocurrency market. It was created by software engineers Jackson Palmer and Billy Markus as a means of poking fun at the emerging digital currencies of the time, such as Bitcoin. Nicknamed ‘the meme coin’ due its basis on an internet dog meme, the Dogecoin has enjoyed a rise in popularity. Endorsements from influential figures, such as Elon Musk and Snoop Dogg, have only helped increase Dogecoin’s popularity further. Although Dogecoin uses the same technology as Bitcoin when verifying transactions, it processes these much faster and at a lower cost than its rival.
Ether
Ether is the currency that’s traded on an open-ended blockchain platform known as Ethereum. The aim of this software platform is to enable a decentralised suite of financial commodities that anyone in the world can freely access, regardless of their ethnicity, nationality, or faith. This makes Ethereum attractive to people living in countries lacking in state infrastructure because it enables them access to loans, bank accounts, insurance, and other financial products.
Ethereum allows smart contracts and decentralised applications, known as dApps, to be constructed without any downtime, control, interference, or fraud from any third party. Unlike other cryptocurrencies like Bitcoin and Litecoin, there is an unlimited supply of Ether, so it can be mined indefinitely. It’s also much faster to mine, at just 15 seconds. Until recently, Ethereum used the same proof of work (PoW) consensus as Bitcoin. PoW is a security measure, first used by Bitocin, that helps networks prevent attacks. The platform has now adopted a proof of stake (PoS)algorithm, a newer concept devised to overcome the limitations in the scalability of the blockchain network.
Conclusion
There is no doubt that the blockchain market is expanding at an impressive rate, with new cryptocurrencies being launched all the time. With this expansion can only come more technological developments, providing more investment opportunities and more rival currencies to Bitcoin
