Not only has Bitcoin become a trendsetter, it has become the de facto norm for cryptocurrencies, inspiring an ever-growing legion of followers and spinoffs, ushering in a flood of cryptocurrencies based on a decentralised peer-to-peer network. But you really need to know the Most Important Cryptocurrencies Other Than Bitcoin, so that you can invest in a great future.
5 Most Important Cryptocurrencies Other Than Bitcoin
1. Ethereum (ETH)
Most Important Cryptocurrencies Other Than Bitcoin
Ethereum, the first Bitcoin alternative on our list, is a decentralised software platform that allows the development and operation of Smart Contracts and Decentralized Applications (DApps) without any downtime, fraud, control or intervention by a third party. The purpose behind Ethereum is to establish a decentralised suite of financial products that can be freely accessed by anyone in the world, irrespective of nationality, ethnicity or faith. This feature makes the ramifications more compelling for those in certain countries, as those without state infrastructure and state identifiers will have access to bank accounts, loans, insurance, or a number of other financial items.
On its platform-specific cryptographic token, ether, the applications on Ethereum are run. Ether is like a vehicle on the Ethereum blockchain for moving around and is pursued by most developers looking for applications within Ethereum to build and operate, or now by investors looking to make purchases of other digital currencies using ether. After Bitcoin, Ether, released in 2015, is currently the second largest digital currency by market value, although it lags by a substantial margin behind the dominant cryptocurrency. As of January 2021, the market cap of the ether is around 19 percent of the value of Bitcoin.
Ethereum introduced a pre-sale for ether in 2014 that received an overwhelming response; this helped usher in the original coin offering era (ICO). According to Ethereum, it can be used to “codify, decentralise, secure and trade just about anything.” Ethereum was split into Ethereum (ETH) and Ethereum Classic following the assault on the DAO in 2016. (ETC). Ethereum (ETH) had a market cap of $138.3 billion and a per-token value of $1,218.59 as of January 2021.
Ethereum plans to change the algorithm for consensus from proof-of-work to proof-of-stake in 2021. This move will allow the network of Ethereum to run itself with much less energy as well as enhanced transaction speed. Proof-of-stake encourages members of the network to “stake” their ether into the network. This method helps protect the network and process the occurring transactions. Those that do this are equivalent to an interest account, rewarded ether. This is an alternative to the proof-of-work system of Bitcoin, where miners are compensated for processing transactions with more Bitcoin.
2. Litecoin (LTC)
Second Most Important Cryptocurrencies Other Than Bitcoin
Litecoin was one of the first cryptocurrencies to follow in Bitcoin’s footsteps, released in 2011, and has also been referred to as “silver to the gold of Bitcoin.” It was founded by Charlie Lee, a graduate of MIT and former Google engineer. Litecoin is based on a worldwide open source payment network that is not regulated by any central authority and uses “scrypt” as a proof of work that can be decoded using consumer-grade CPUs.
While Litecoin is in many respects like Bitcoin, it has a faster rate of block generation and therefore provides a faster confirmation time for transactions. There are an increasing number of merchants who embrace Litecoin, apart from developers. As of January 2021, Litecoin had a market cap of $10.1 billion and a per token value of $153.88, making it the sixth-largest cryptocurrency in the world.
3. Cardano (ADA)
Third Most Important Cryptocurrencies Other Than Bitcoin
Cardano is a cryptocurrency “Ouroboros proof-of-stake,” which was developed by engineers, mathematicians, and cryptography experts with a research-based approach. Charles Hoskinson, one of the five original Ethereum founding members, co-founded the project. He left and later helped to create Cardano after having some differences with the direction Ethereum was going.
Through extensive experimentation and peer-reviewed analysis, the team behind Cardano developed its blockchain. Over 90 articles on blockchain technology across a variety of topics have been published by the researchers behind the project. This study is Cardano’s backbone.
Cardano seems to stand out among its proof-of-stake peers and other large cryptocurrencies due to this rigorous method. The “Ethereum killer” has also been called Cardano as its blockchain is said to be capable of more. That said, it is still in its early stages for Cardano. While it beat Ethereum to the proof-of-stake consensus model, in terms of decentralised financial applications, it still has a long way to go.
By establishing decentralised financial products similar to Ethereum, as well as offering solutions for chain interoperability, voter manipulation, and legal contract tracking, among other things, Cardano aims to be the world’s financial operating system. Cardano has a $9.8 billion market capitalization as of January 2021, and one ADA trades for $0.31.
4. Polkadot (DOT)
Fourth Most Important Cryptocurrencies Other Than Bitcoin
Polkadot is a special cryptocurrency proof-of-stake that aims to deliver interoperability between other blockchains. Its protocol is intended to link approved and unauthorised blockchains as well as oracles to allow systems to work together under one roof.
The core component of Polkadot is its relay chain that enables the interoperability of various networks. For particular use cases, it also makes “parachains,” or parallel blockchains with their own native tokens.
Where this framework differs from Ethereum, developers can build their own blockchain instead of building only decentralised applications on Polkadot, while still utilising the protection that Polkadot’s chain already has. Developers can build new blockchains with Ethereum, but they need to develop their own security mechanisms that can leave new and smaller projects vulnerable to attack, since the greater the security of a blockchain, the more it has. This idea is known as shared security in Polkadot.
Gavin Wood, another member of the core founders of the Ethereum project who had conflicting views on the future of the project, created Polkadot. As of January 2021, Polkadot has a market capitalization of $11.2 billion and one DOT trades for $12.54.
5. Binance Coin (BNB)
Fifth Most Important Cryptocurrencies Other Than Bitcoin
Binance Coin is a cryptocurrency utility that operates on the Binance Exchange as a payment method for the fees associated with trading. Those using the token can trade at a discount as a means of payment for the exchange. The blockchain of Binance Coin is also the platform on which Binance’s decentralised exchange works. Changpeng Zhao founded the Binance exchange and the exchange is one of the most widely used exchanges based on trading volumes in the world.
Initially, Binance Coin was an ERC-20 token that ran on the blockchain Ethereum. Eventually, it had its own launch on the mainnet. A proof-of-stake consensus model is used by the network. As of January 2021, with one BNB having a valuation of $44.26, Binance has a $6.8 billion market capitalization.