Before early 2017, Bitcoin had made up between 75% and 95% of the cryptocurrency market cap. Since then, hundreds of new cryptocurrencies have entered the market and users now have more than 2,000 different digital currencies to choose from. Popular alternatives like Ethereum, Litecoin, and Stellar are becoming increasingly more competitive with Bitcoin as they find ways to improve on the cryptocurrency format.
Ethereum is widely considered the second important cryptocurrency after Bitcoin. It has had this reputation for a while despite the fact that the Ethereum price is nearly three dozen times lower than Bitcoin’s.
One thing that separates Ethereum from Bitcoin is that Ethereum has use cases outside of its utility as a currency. Ethereum is a decentralized and public blockchain platform that centers on developing applications. Because Ethereum is so versatile, it can benefit any industry that uses blockchain technology, including communications, technology, finances, and banking.
The second thing that sets Ethereum apart is its use of smart contracts. A smart contract is a computer protocol which makes it easier to validate and enforce contract negotiations and performance. These protocols are built into a blockchain network. This is useful when it comes to automatic business operations. For instance, with a smart contract, you can set up your system so that your company automatically purchases a product when inventory reaches a certain level and have the legally-binding term of the purchase automatically set in place.
Another benefit of Ethereum is that it has consistently been one of the most profitable digital coins to mine.
Litecoin is an interesting option because, like Bitcoin, it focuses on facilitating day-to-day financial transactions and aims at becoming a global currency. Most digital currencies attempt to differentiate themselves from Bitcoin by highlighting alternative uses for blockchain, but Litecoin’s approach is to do what Bitcoin does but to do it better.
Litecoin is an open-source, decentralized peer-to-peer cryptocurrency. With Litecoin, users can make instant payments all over the globe with minimal transaction fees.
Last year, the Litecoin blockchain network averaged 10,000 transactions per day, but now the number is over 30,000. One thing that Litecoin has been going for is the shorter block processing time – and it seems they are doing a good job. It usually takes the Bitcoin network ten minutes to process a transaction. Litecoin can process the same transaction in 2 minutes. Essentially, the advantage of Litecoin is that it has much better validation and settlement times.
One of the best parts about Litecoin is that it gives users more autonomy. Moreover, Litecoin can handle a higher trading volume than Bitcoin.
However, Litecoin has also had its complications. They developed a payment platform to support their coins called LitePay, which has never been launched. Despite this upset, LitePay still has a lot of potentials, and if the platform can find ways to improve its usability, they could give Bitcoin a run for their money.
Stellar Lumen is a newer coin that has already made a big name for itself. One of the most impressive qualities about Stellar and its Lumens is its speed. Most transactions that go through the network can be validated and settled within 2-5 seconds. With other banking systems, transactions might take five business days, which is obviously a lot longer.
Similarly to Ethereum, Stellar also uses smart contracts. Users of Stellar have the ability to make custom, automatic, and legally-binding contracts which can help businesses become more efficient.
Together, these two qualities make Stellar a phenomenal alternative to Bitcoin.
Recently, Stellar has entered into several important partnerships. Their Lumens coin has been incorporated into the IBM blockchain project and is used at more than 11 different banks in the South Pacific. Stellar is also working alongside the ICICI bank, which has over 4,860 branches throughout India and subsidiaries in 16 other countries. Essentially, banks use the blockchain technology to speed up payment settlement and validation. This suggests that Stellar will attract new users and become even more competitive against Bitcoin as time goes by.
Bitcoin is the most popular cryptocurrency in the world and has led the cryptocurrency boom, but it is becoming harder and harder to obtain. There are fewer coins to mine and the number will only decrease. Moreover, the hardware required to mine Bitcoin is going to become more expensive. If competitors are smart, they can use the limited supply of Bitcoin to their advantage to grow their user base.
There are many crypto enthusiasts who want to purchase or mine digital assets, so there is an opportunity for alternative cryptocurrencies. Ethereum, Litecoin, and Stellar Lumens are in the best position to compete with Bitcoin. All three are growing in popularity and offer noticeable advantages over Bitcoin. In addition, they also have a lot more uses and application areas, especially for businesses, investors, and blockchain-based projects.