Is Bitcoin the best crypto?

6 other cryptos which can be an alternative to Bitcoin

I am sure most of us who read the news are aware of Bitcoin’s recent rise and fall. This crypto currency has the highest market capital in the crypto currency market right now. As it is the most valuable crypto ; it attracts a lot of investor interest. But is it the best crypto available in the market? Let’s take a look.

source

Let’s first take a look at Bitcoin first to better understand it.

Bitcoin

Market Cap: $757,445,475,929

Bitcoin: It was created in the year 2009. It is still not clear as to who is behind the creation of this crypto currency. All the information we have on the creator is that he had an alias Satoshi Nakamot. There is no governing body to for this crypto currency. It is decentralised meaning that there is no central authority/intermediary to regulate and validate transactions. This decentralised system is done with the help of block-chain technology. This block chain technology helps in storing each and every transaction in a public ledger which is accessible to all. This makes it hard to reverse or fake a transaction. So how is this secure? Well the decentralised system is why it is so secure. In order for a bitcoin transaction to be added to the block it has to be validated by majority of bitcoin holders and the unique codes used to recognise users’ wallets and transactions must conform to the right encryption pattern.

Now that we have taken a brief look at Bitcoin . Let’s take a look at its cons:

Bitcoin Cons:

As much as we like everything has its cons. Let’s look at three:

1. A bitcoin transaction needs a mojority of the holders to validate it. Hence this can cause a scalability issue as it might run into issues if more transactions are done at one time.
2. Bitcoin transaction fees is high as a bitcoin block size is 1MB. The miners can only confirm 1MB worth of transactions for each block (one every ten minutes). Hence the fees increased dramatically.
3. Bitcoin consumes a lot of energy. This is indirectly harmful to the environment.

Now we have an understanding of Bitcoin let’s take a look at some of the other coins:

Ethereum

Market Cap: $310,787,143,353

Ethereum: It is the second most traded crypto currency after bitcoin. It was created in the year 2015. It is unique for its open source block-chain based, decentralized software platform that provides an extra layer of security to investors. It is also a programming language that helps developers to build and publish distributed applications. Bitcoin can only be used as a digital currency. Ethereum is much more. It can be a platform on which games and software can be built on.

Ethereum Cons:

1. Ownership distribution: Fewer than 400 individuals own almost 1/3rd of all circulating units. This poses a problem as these people have the power to influence the value of the coin. All it takes is one of these persons to sell and the prices can shoot up or down.
2. Slow Transactions Speed: Although Ethereum has transaction speed double that of bitcoin it still is slow.
3. Transaction cost: Due its use of the block-chain ethereum also has the problem of increasing transaction cost. This can make it uneconomical for people to continue using the platform.

Binance Coin

Market Cap: $58,143,090,771

Binance Coin: Binance Coin is a digital crypto coin that is used to trade and pay fees on the Binance cryptocurrency exchange at 0.1% per trade fee. It was created as a utility token for discounted trading fees in 2017. It was initially based on the Ethereum platform but now it is the native currency of the Binance own block chain Binance chain.

Binance Cons:

1. It has a limited supply of 200 million token and they plan to buy back and burn the tokens until only 100 million tokens are in circulation. This is being done as a way to maintain the value of the token.
2. Binance is highly dependant on the binance exchange. So it’s value will also be based on the exchange’s reputation . The Binance exchange is under investigation by the US Justice department for illicit transaction and money laundering. As the market is unregulated the individuals have been free to carry out such activities.
3. It is one of the main targets of cyber attacks.There was an unsuccesful attack in March 2018 and a succesful one on May 2019 which led to a loss of $40 million.

Tether

Market Cap: $58,623,548,831

Tether: It is a stable coin which aims to keep the crypto currency market stable and less volatile while also maintaining gradual growth. Tether tokens are backed by the fiat reserves which Tether Limited, the company behind Tether. It basically takes away the need for the overhead in converting your fiat money into crypto tokens.

Tether Cons:

1. The details of auditing the reserves are not public, and there is a fear that Tether Limited might be minting fake Tether and be involved in money laundering.
2. Hiding important information. For unknown reasons, Tether concealed its direct connection with the Bitfinex exchange and reported this fact only after the release of direct evidence. This is very important information, because it shows a low level of frankness of the company.
3. It is just one company which owns, mints, distributes the coins which has the issue of the coins’ value being attached to the company’s reputation.

Cardano

Market Cap: $54,675,067,918

Cardano:It is a decentralised third-generation proof of stake blockchain platform. Created in 2017, the digital currency’s functionalities are similar to that of other blockchain cryptocurrencies like Ethereum. However, Cardano stands out from the others as the developers use peer-reviewed scientific research as the building blocks for updates, to make sure any changes made are useful and scalable. It will be the first blockchain to use multiple layers (settlement & computational layer). There is no limit to scaling, When more people use blockchain, more transactions can be processed, The ADA cryptocurrency offers cheap & quick transactions, Cardano’s consensus mechanism is more environmentally friendly than older blockchains, as well as being fairer.

Cardano Cons:

1. It has not developed fully yet. Most of the features such as smart contracts and token standards are yet to be built in this platform. The developers have been very slow in bringing about changes.
2. As we pointed out in the first point due to slow development the scalability of cardano coins is very low at the moment. While other coins can process 1000+ transactions per second. Cardano can at the moment handle only 257 transactions per second.
3. Cardano is still an unproven platform that has not been tested in full, unlike Ethereum and Bitcoin.

Dogecoin

Market Cap: $50,298,821,370

Dogecoin:It started as a joke to mock the cryptocurrency craze in 2013 . Now it one of the most trending coins in the market partly in thanks to tweeting by Telsa CEO Elon Musk and Rapper Snoop Dogg. With Elon Musk’s tweets the price of Dogecoin and the crypto currency market has been fluctuating. It recently touched a market value of $50 billion recently.

Dogecoin Cons:

1. It is extremely volatile . Much more than bitcoin or other crypto currencies.
2. It was created as a joke and so does not have any underlying value
3. It does not have a market cap which indicates that there could be any amount of coins in the market which in turn means the more the coins in the market the lesser the value.

XRP

Market Cap: $51,904,640,994

XRP: XRP is a technology that acts both as a cryptocurrency and a digital payment network for financial transactions. First released in 2012, XRP is an open-source, permissionless, and decentralized blockchain technology that can settle transactions in 3–5 seconds. It is much faster than other crypto coins. Ripple is the company behind XRP. Ripple offers an alternative platform that can facilitate cross-border payments which are 100% secure, instant, and practically free. Moreover, Ripple can facilitate payments in every type of money, including cryptocurrencies.

XRP Cons:

1. All the xrp coins are pre-mined. This means that you cannot mine xrp coins. All the coins which can exist are already in circulation.
2. Ripple Chairman Chris Larsen owns about a third of all the circulating XRP coins. So the market value is influenced by him.
3. There are arguments that XRP is not exactly decentralized as Bitcoin or Ethereum. It was actually created to solve the issues in the banking system and the reduce the transaction costs.

So we have looked at the top 7 crypto currencies in circulation according to market cap. Bitcoin is by far the market leader. But the other crypto coins are not far behind. We will have to see how the governments will react in different countries to see the outcome of the crypto world in the future. For now we can only buy them as an asset. But in the future it has the possibilty of doing much more than that. There is no doubt that the technology is revolutionary , there is only the wait for the governments to come to terms with how to regulate these crypto currencies.

So I hope this piece has been helpful. Do give a like and share with your friends.

You can reach me at LinkedIn.