Crypto Comparison Shopping - Altcoins and Bitcoin
Jul 13, 2018 By Katherine Flores
Bitcoin began in 2009 and owned the market for two years before altcoins started in 2011. It's a lot like the origin story of branded burgers because McDonalds started exactly two years after Burger King began. Even the rationale of this analogy matches. Want a better burger? Make it a competition. A competitive market creates diversity of choice and improvements for consumers. No matter if they're buying fast food or cryptocurrency.
Bitcoin's Strengths Vs. Altcoins
Bitcoin is easier to access and has more merchants, exchanges, hardware, and software support. It's also significantly more liquid, with a much larger market cap than any altcoin.
So, any startup based on Bitcoin already has a larger prospective client base while the younger altcoins are challenged to attract a sufficient user base. That's because new Bitcoin services benefit from the built-in network effect. Altcoins have to build from zero.
Still, thanks to growing interest in cryptocurrency, new altcoin variations arise daily. Each has unique features, algorithms and goals. Examples include: user anonymity, competitive fees, faster transaction times, etc.
So, when you choose your own coin think about what matters most to you and follow that path. For instance, if you're all about trading some altcoins are more volatile than bitcoin and might give you an edge.
While they may be in direct competition now, altcoins could eventually find a niche to work in tandem with Bitcoin. They may each perform a specific role in the market. For instance, small Brick and Mortar store transactions may use Litecoin. Meanwhile Bitcoin works best for larger payments. For untraceable transactions, there's Monero. While Etherum could be the go-to contract currency.
Speaking of altcoin examples, here's a quick list of some popular altcoins and a teeny tiny taste of what makes them popular in the competitive marketplace.
Zcoin - The first useful zero-knowledge proof based anonymous cryptocurrency.
Zcash - First to use the zerocash protocol. This preserves the privacy of the user.
Monero - The most untraceable transactions. Hides identities and amounts.
Litecoin - Called Lite because it's a bit like Bitcoin "lite" in that it can be mined with consumer-grade hardware. That means it doesn’t require as much CPU.
Namecoin - First merged-mined altcoin. Merged-mined means two different currencies based on the same algorithm are mined at the same time.
Dash - Solved many of Bitcoin's issues with innovations to prevent doublespending as well as privacy and time challenges. Popular despite concerns about its failure mode.
Ethereum Classic - Majority premine sale. Premining means the coins are mined before they are made publicly available.
BCH - Proponents often deliberately attempt to confuse new users into thinking BCH is Bitcoin.
You'll definitely want to delve further into what makes each altcoin special and check valuations on crypto exchanges. But first, figure out what attributes you're truly seeking in a cryptocurrency. Keep your priority list top of mind. It can help locate the right coin for you in the complex and ever-changing cryptocurrency choices.