With the increasing pace of technology transformation, the once thought idea of internet money became real and has been able to change the course of success of many entrepreneurs and mind gamers. "Altcoin" is a combination of two words: "alt" and "coin"; alt is short for alternative and coin signifies currency. Thus together they imply a category of cryptocurrency that is alternative to the digital currency Bitcoin.
The basic frame work of many Alt-Coins is based on the one provided by Bitcoin. Hence they most of Alt-Coins are peer-to-peer, involve a mining process and offer efficient and cheap ways to carry out transactions on the web. But even with many overlapping features, Alt-Coins vary widely from each other.
There are some alternatives of Bitcoin that can someday rival the Bitcoin in market of digital currencies. In fact the competition is getting tight that’s why we’re going to take a moment to go over Bitcoin’s chief competitors and conclude the importance of Alt-Coins.
Ethereum:
Currently, etherium is the world’s second largest cryptocurrency by market capitalization. The attention for Ethereum is increasing lately. They aims to support a lot more than “just” a digital currency. Developers can actually code software, and then power that software through the public blockchain.
Individuals are able to sell their processing power and get paid with “ether” (also a digital currency) in exchange.
After a hack back in July, Ethereum split into two competing currencies that are now rivals of each other in competition. The “new” Ethereum (just called Ethereum) undid the hack. “Classic” Ethereum maintained the hack.
Ethereum itself has a market cap north of $1 billion dollars, and is the second largest digital currency, trailing only bitcoin. Ethereum classic has a market cap of just over $141 million, making it the fourth largest digital currency.
Ripple:
Ripple emerged in 2012 and is now preceding Ethereum in the cap market of digital currency. It is very popular online payment processing platform and digital currency. The highlighted aspect of ripple is that it allows for instant conversion into different currencies. You can even convert bitcoin to ripple, and vice-versa.
Ripple’s distributed financial technology enables banks to send real-time international payments across networks. Using Ripple, one’s bank can acquire new customers and grow revenue through differentiated products and services.
Its investors include globally recognized venture capital firms and strategic investors (Standard Chartered, SBI group etc.) OpenCoin, the company behind ripple, plans to distribute 100 billion ripples, although only half will be put into circulation.
With a market cap of 6 billion dollars, Ripple is the world’s third largest digital currency.
Litecoin:
Litecoin is one of the older alternative digital currencies out there, having emerged in 2011. One of the main advantages offered by the Litecoin network is faster transaction confirmation, making it ideal for small-size purchases.
Litecoin’s overall cap limit is set at 1 billion dollars, compared to bitcoin’s 28 billion. The algorithms themselves are much easier to solve and can still be solved without special mining equipment. Further, litecoin blocks are created in very short intervals of time making it possible to support far more transactions.
Nem:
NEM is not just a crypto currency. NEM is a blockchain project which caters to much more than only handling it's native currency tokens "XEM". But most importantly NEM is a peer to peer platform and it provides services like payments, messaging, asset making, and naming system. There shall be a lot more to come as NEM is an evolving solution with an cap of more than 950 million dollars.
Apart from NEM being another crypto currency, NEM is a solution platform. As a crypto currency, it does not require a lot of computing power and energy to run a node. NEM also advocates low entry barrier with Proof of Importance (POI) instead of the traditional ones that require a lot of stakes or computing power to mine. In NEM they call it harvesting. As an evolving solution, NEM is setting the stage for better things to come.
Dash:
Dash is based closely on Bitcoin software. Initially, developers wanted to look into the account of problems inherent in Bitcoin (like slow transaction) but ended up creating a new currency.
Dash features advanced privacy features. Some would even say that dash offers improved privacy. Dash also offers instant transactions, whereas bitcoin transactions can take several minutes.
Further, dash uses what it calls “Masternodes” to double check the blockchain and to ensure that it is not being unduly manipulated.
Fees are low, the system is global, dash is P2P with no centralized authority. It’s certainly worth a close watch as its given technical advantages are user friendly.
Future of Alt-Coins:
The increasing number of of Alt-Coins on the daily basis adds competition in Cap Market regularly. But some predict that 90 percent of altcoin will probably die out in the near future.
On the sustainability of cryptocurrencies, Hoskinson, who was with Ethereum before crossing the carpet to ETC, outlined what makes a digital currency thick.
As for most cryptocurrencies, I agree completely they will likely die out, Hoskinson related. “As 90 percent of businesses usually fail in the first few years, there is no reason to believe that coins are any different.”
Recently some Alt-Coins have come under scrutiny for employing pump and dump tactics to swindle its holders. Case in point is CageCoin, that recently rose by 31,000 percentage point but fell miserably within 24 hours.
It is very imperative that community members undertake the necessary due diligence when they are investing in any coin. This is very crucial at a stage where digital currency is scaling and convincing skeptics, it is not going anywhere anytime soon.
The tightening competition for Bitcoin:
Bitcoin isn’t going away in near future, it might remain the most important global digital currency. But finance is bound to be transformed one day. Competitors for the best altcoin like Ethereum and Litecoin are offering very exceptional ways on digital currencies. Others like Dash and NEM, might become more technically advanced. Eventually these competing currencies may someday catch up to, or even surpass, bitcoin.
In addition to the currencies mentioned in this article, there are several other worthy competitors. Steem, MaidSafeCoin, and NXT are just a few competing currencies that come to mind. In the future, the digital currency environment is bound to transform its state, so it’s good to keep track of the beneficial technique.