Bitcoin is the cryptocurrency king - this is rarely questioned. Although the recent stats indicate a serious meltdown of prices, Bitcoin has a capitalization of around $80 billion, which is 53% of the total market value. This is 4x greater than its immediate rival, which is XRP with just $18 billion. Furthermore, Bitcoin has been around much longer, has a great infrastructure, and an army of supporters including developers and investors.
But will this hold true for the long term? Will Bitcoin remain the top dog indefinitely? Many people believe that Bitcoin has had its hay day and other altcoins will inevitably take over. They believe that Bitcoin is flawed and that some altcoins have much more to offer. Take a look at the altcoins that have the most potential to prosper and decide whether they can replace Bitcoin in the future.
Could Bitcoin potentially be de-throned?
To answer this question, one should first consider the inherent problems with Bitcoin. Sure, this cryptocurrency is by no means perfect. It has several flaws that were not initially intended. During its inception, Bitcoin was meant to offer low transaction fees and total decentralization. In reality, this has not happened. The following are two main issues Bitcoin faces:
- Increasing energy requirements for mining - Bitcoin mining is extremely energy-intensive. To mine Bitcoin, you need an advanced computer rig with specialist software. You must then run that rig and software 24/7 to mine a decent amount of coins. This process is power-hungry. Moreover, as the complexity of the hash function increases, so does the energy requirements. This is counterproductive in an era where we look to reduce energy consumption by introducing green alternatives.
- Higher transaction fees - Originally, Bitcoin was meant to have ultra-low transaction fees. During its inception and development, this was true. As time progressed, however, miners started being selective in which transaction they would verify, i.e. they would rather verify transactions that gave them a higher fee. This selective process has driven up the overall costs for a Bitcoin transaction.
4 Altcoins that improve upon Bitcoin
Now we can actually look at the altcoins that might claim the crypto crown. There are hundreds of altcoins circulating today. Not every altcoin will prove a success, however. Some gain initial interest but fail to build momentum and support. Others don't even raise enough funds during their ICO. However, the ones listed below have exceptional potential and could challenge Bitcoin at some point:
Current Market Cap - $18,712,607,695
Current Coin Circulation - 40,327,341,704
XRP is a hugely promising cryptocurrency that has a lot of positives. Firstly, it is actively used by financial institutions and banks. Moreover, it boasts a number of game-changing partnerships with real-life applications around the corner. This gives it greater stability.
Secondly, Ripple is also optimized in a way that makes it suitable for modern business. It has minuscule transaction fees and its transaction times are extremely fast. Thirdly, Ripple is pre-mined - all coins are already in circulation and thus there is no need for a complex and power-hungry mining process.
Current Market Cap - $14,428,187,084
Current Coin Circulation - 103,317,819
Ethereum has long been the main competitor to Bitcoin. Despite that it has recently been displaced from its second spot by XRP, Ether continues to gain traction. At the offset, this cryptocurrency has excellent transaction speeds and a brilliant development team committed to making Ethereum work better.
Aside from these factors, Ethereum already has a huge market capitalization, and this only looks to increase as countries such as Russia continue to support its development. Moreover, Ethereum has an outlook based on smart contracts - not a digital currency itself, therefore it is not purely focused on investment, which can help longevity.
Current Market Cap - $4,363,832,141
Current Coin Circulation - 17,468,450
Although Bitcoin Cash is a newcomer, it has already surpassed most cryptocurrencies in market capitalization. Bitcoin Cash is a hard fork of the original Bitcoin cryptocurrency. This currency was formed to help overcome some of the perceived problems Bitcoin was facing, such as scalability and speed.
The block size is a major factor why Bitcoin Cash could overtake its predecessor. Each block size in BCH is 32MB, which can allow for a lot more transactions than that of the 1MB Bitcoin block. This means BCH has a greater scope for scalability. At the moment, it has limited use, but in the future, it can certainly gain traction.
Current Market Cap - $2,079,767,856
Current Coin Circulation - 59,238,013
Litecoin is an old-timer in the cryptocurrency industry and has been around since 2011. This currency has been undervalued and gone under the radar for some time - it is always overshadowed by Bitcoin. That being said, Litecoin has a number of benefits. Firstly, Litecoin has a much greater supply limit of 84 million compared to Bitcoin's 21 million.
Secondly, Litecoin mining times are a fraction of Bitcoin's and the transaction speed is also superior. In short, Litecoin is simply faster and more efficient than Bitcoin, which is a huge plus.
To sum it up
As you can see, Bitcoin does face some problems. If the cryptocurrency hopes to retain its position as the number one market leader, it must address these problems head-on. If not, we could see some of the above-mentioned altcoins or the newly emerged ones pushing through and claiming the cryptocurrency crown in the near future.
There is no saying what day (if any) a shift in power may come, but the precautions can be taken today. The cryptocurrency industry is young and thus risky, so you should be ready for the bumpy rides. Before plunging into the world of investment, spend a little while researching the space, weighing all pros and cons, as well as planning your retreat with minimum losses.