Despite the difficulties in the stock market and strong fluctuations in the prices of cryptocurrencies, it is impossible not to admit that this type of asset has firmly entered the lives of investors and traders.
Bitcoin was created in 2008 and has haunted many experts and developers ever since. It remains the main asset through which the world knows about digital currency. But BTC technology is not perfect. Today we will consider the question: can any cryptocurrency repeat bitcoin's fate using less complex algorithms?
The reverse side of the technological breakthrough.
Many call Bitcoin a breakthrough in computer science that draws on 20 years of research on cryptocurrencies and thousands of researchers worldwide. However, imperfections remain. The disadvantages of bitcoin are:
Low transaction speed;
Also, there are no government regulations for Bitcoin that can be attributed to the cons. Bitcoin transactions do not come with legal protection and are typically not reversible, making them susceptible to scams.
Considering all the shortcomings of Bitcoin, its competitors are intensively developing their technologies to be superior both technically and functionally.
Are there any alternatives?
According to CryptoState, 79 private crypto assets were actively traded on exchanges in 2021. Since BTC is the leading crypto by far, all other coins have been labeled "Altcoins."
If you are looking for solid Altcoins. Here is our list of the ones to watch out for:
- Ethereum (ETH);
- Cardano (ADA);
- Litecoin (LTC);
- Dash (DASH);
- Solana (SOL).
Over the years, technology has changed faster and more often. Just remember how surprised we were with the first mobile phones. And after 15 years, each of us has a powerful computer in our pocket with many features of other devices.
Use the same model to make it easier to imagine the difference between BTC and its alternatives. Bitcoin is like your PC a few years back, and altcoins are like your mobile phone now.
What cryptocurrency can repeat the fate of Bitcoin?
According to the CoinMarketCap website, since the beginning of 2021, the market capitalization of altcoins has increased by 86%. From $226.85 billion in January to $1.62 trillion in November. On the contrary, the Bitcoin Dominance Index fell 26.1% (from 69,7% to 43,5%) over the same period.
One of the drivers of change is the growing role of altcoin assets such as Ethereum, Litecoin, Cardano, Monero, etc.
And now we come to the topic of this article - which cryptocurrency can repeat the fate of Bitcoin? Many analysts agree that Ethereum (ETH) will be able to push Bitcoin off the pedestal in a few years. Why?
- The infrastructure of ETH is technically more advanced;
- Thanks to constant updates and good marketing, the price of the asset is growing (since mid-2015, the cost of the currency has increased from $2.77 to $2679);
- Given the data from 2021, ETH has every chance to bypass BTC in terms of capitalization;
- The release of the Ethereum cryptocurrency is regulated: no more than 18 million coins per year. Developers can also burn a certain number of coins in their possession to limit the supply, thereby increasing the asset's value.
A few final thoughts.
Cryptocurrency is first and foremost technology and only then a currency. It is not difficult for a good programmer to create a cryptocurrency these days (YouTube alone has hundreds of tutorial videos on creating your coin). However, making this technology a currency is much more difficult.
Bitcoin, as a pioneer, remains the most expensive but, at the same time, trusted crypto. Investors support it, and almost every person knows about its existence even without understanding this topic.
Most likely, in the next few years, the position of Bitcoin will still be leading. But with the emergence of such strong alternatives, things may change. Experts and analysts are increasingly highlighting Ethereum as the possible option for the leading cryptocurrency.
There is still colossal risk and volatility in investing in crypto. It is necessary to draw up a clear strategy. And always remember that the same investing rule works here - you can't put all your money in one coin. Diversify your investments, and do not forget the traditional stock market to secure your positions.
Stay tuned to know more!