Bitcoin and Ethereum have not just been trendsetters, leading in a wave of cryptocurrencies built on a decentralized peer-to-peer (P2P) network. They enhance the de facto standard for cryptocurrencies, encouraging an ever-growing legion of followers and spinoffs.
However, many now find themselves wallowing in remorse for not investing in Bitcoin and Ethereum when they were still relatively cheaper. In this article, we plan to help them catch the next wave of altcoins which are affordable for now, but have high potential yield. Here are 9 altcoins you should consider investing in rather than Bitcoin or Ethereum.
But before we catch a closer look at some of those alternatives to Bitcoin or Ethereum, let’s move back and briefly examine what we mean by terms like cryptocurrency and altcoin.
Table of contents
What Are Cryptocurrencies and Altcoins?
A cryptocurrency, broadly defined, is virtual or digital money that takes the form of tokens or “coins.” Simultaneously, some cryptocurrencies have ventured into the physical world with credit cards or other projects. The large majority remain entirely intangible.
The “crypto” in cryptocurrencies refers to intricate cryptography, which allows for organizing and processing digital currencies and their transactions over decentralized systems. Besides this important “crypto” feature of these currencies is a typical involvement in decentralization.
Cryptocurrencies are typically generated as code by teams who build in mechanisms for issuance and other controls. Cryptocurrencies are practically always designed to be free from government manipulation and authority.
Although as they have become more popular, these foundational features of the industry have come under fire. The currencies created after Bitcoin are collectively called altcoins, and in some instances “shitcoins,” and have often proposed to present themselves as modified versions of Bitcoin.
While some of these currencies may have some exciting features that Bitcoin does not, matching the security level that Bitcoin’s networks offer has been a challenge for most altcoins.
Below, we evaluate some of the most popular digital currencies other than Bitcoin or Ethereum. First, though, a list like this cannot be entirely comprehensive. One reason for this is that there are more than 4,000 cryptocurrencies in presence as of March 2021.
While many of these cryptos have little to no following or trading volume, some enjoy extensive popularity among dedicated communities of backers and investors.
Here are the 9 Best Altcoins List to Invest in 2021
1. Litecoin (LTC)
Litecoin was founded in 2011 as a result of a hard fork of the first Bitcoin blockchain.
The team behind Litecoin desired to solve Bitcoin’s problems in terms of slow performance speed. This caused significant network bottlenecks which proves problematic, given the increasing amount of transaction traffic in the blockchain..
Bitcoin also had more expensive transaction fees. To address these problems, the team initiated a hard fork in the original Bitcoin blockchain, starting with the creation of Litecoin.
Litecoin is arguably faster than Bitcoin, with the cryptocurrency able to prepare a block in 2.5 minutes. Litecoin is proficient in processing about 56 transactions per second.
Aside from this, Litecoin is also much easier to mine than Bitcoin. Litecoin uses Scrypt as a Proof-of-Work (PoW) consensus mechanism, allowing users to mine it using consumer-grade computers.
Litecoin is often mentioned as the silver to Bitcoin’s gold due to its similarities with Bitcoin. It is rapidly gaining popularity with businesses and multinational companies that accept LTC as a mode of payment.
Currently, hundreds of businesses accept Litecoin as payment, with the number growing every year, thanks to Litecoin’s transaction speeds being faster and transaction costs lower.
2. Bitcoin Cash (BCH)
Like Litecoin, Bitcoin Cash is also the effect of a hard fork in the original Bitcoin blockchain. The fork started with a group of miners and developers who had cared about the Bitcoin future and cryptocurrencies’ capability to scale. Specifically, they were concerned with Bitcoin’s slow transactions.
Finally, when these developers were unable to reach a consensus, they began a hard fork in August 2017.
Bitcoin Cash built on key features of Bitcoin and also aims to address the scalability issue that bothers Bitcoin. It can process transactions much securely, thanks to an extended block size of 8MB. The increased block size allows added data to be processed, increasing the speed of transactions on the blockchain while also decreasing the transaction costs.
Bitcoin Cash has been inviting significant investor interest since the start of the year and has taken public endorsements from cryptocurrency experts like Roger Ver and, more recently, Kim Dotcom.
The cryptocurrency is currently in line with the largest market, with a market capitalization of $9 billion.
The recent endorsements of cryptocurrency have seen a notable increase in it by investors and crypto believers.
3. Ripple (XRP)
Ripple is a for-profit platform and cryptocurrency developed by Ripple Labs. It produces currency exchange services and real-time payment settlement assistance to banks and financial institutions.
Ripple has partnered with more than a hundred companies and financial institutions that use it for its high-speed transactions. Ripple’s native cryptocurrency, XRP, is currently the 7th most extensive cryptocurrency by market capitalization.
XRP gives liquidity to banks so that they can help cross-border transactions.
Ripple Lab controls the coins’ flow and releases them into the market, and XRP is pre-mined. Currently, there are a total of 45 billion XRP in circulation.
Ripple Lab issues new coins whenever there is a need to maintain the number of coins in circulation. It can also promote traditional fiat currencies like the Pound, Yen, Euro, and Dollar.
The Ripple platform also carries other cryptocurrencies, working as a facilitator for currency exchange and payment processors.
Ripple is making blockchain technology to the cross-border payments industry, competing with traditional payment systems like ACH and Swift.
Meanwhile, Ripple is currently facing a lawsuit filed by the US SEC. If the lawsuit turns into Ripple’s advantage, or if it gets settled, XRP price will become bullish once more. At the moment, it remains at a fixed price near $0.45.
4. Cardano (ADA)
Cardano, similar to Ethereum, is a cryptocurrency and smart contract platform established by former Ethereum CEO Jeremy Wood and Ethereum Co-Founder Charles Hoskinson.
Its founders explain Cardano as a third-generation cryptocurrency. It works the scalability issues that continue to bother first and second-generation cryptocurrencies like Bitcoin and Ethereum.
Cardano is popular among the cryptocurrency community, thanks to its layered design that offers better scalability than its peers. The platform’s native currency, ADA, facilitates users to receive or send funds and conduct transactions.
Cardano ensures transactions on its platform through cryptography, creating transactions fast and secure. Also, Cardano is the world’s leading peer-reviewed blockchain.
The Cardano Foundation has everything its protocols reviewed by scientists and academics from institutions such as the Tokyo Institute of Technology and Edinburgh University. Also, the platform uses a unique Proof-of-Stake (PoS) consensus mechanism called Ouroboros.
Ouroboros gives the protection of a Proof-of-Work consensus mechanism at a section of the energy. It involves processes like cryptography, combinatorics, and mathematical game theory to guarantee the protocol’s longevity, integrity, and performance.
Cardano has the support of three organizations that ensure that Cardano performs without any hiccups. These organizations are:
- The Cardano Foundation supervises the growth of the Cardano blockchain.
- IOHK created Cardano and composed its unique Proof-of-Work consensus mechanism, Ouroboros.
- Emurgo is the company that promotes Cardano and its technology to firms and multinational businesses around the world, supporting its use and choosing of the underlying technology.
5. Tezos (XTZ)
Tezos is a smart contract platform that utilizes a process called an “on-chain governance model.” The on-chain governance model enables Tezos to perform changes and upgrades on the blockchain without performing a hard fork.
A hard fork happens in a blockchain when developers cannot reach a consensus on adjustments that need to be performed, leading to a split in the original blockchain.
On the other hand, the on-chain governance model enables Tezos to upgrade automatically, providing it a significant advantage over other cryptocurrencies.
Tezos works in a reasonably straightforward manner. Users who own XTZ, the Tezos platform’s cryptocurrency, can vote on revisions to be executed on the platform.
Changes execute only when the new rules are granted. Once the rules are accepted, the platform automatically initiates the update.
The automation blocks the Tezos blockchain from splitting. It has guaranteed that decision-making practices are created into the blockchain. This certifies that whatever course the project leads, it has been agreed simultaneously democratically.
The Tezos ICO got a place in 2017 and was the biggest ICO at the time, amassing a total of $232 million.
6. Ethereum Classic (ETC)
Ethereum Classic is a decentralized cryptocurrency platform that works self-executing smart contracts. Similar to the contracts on Ethereum, these contracts are performed once specific predefined requirements written in the contract are met.
Ethereum Classic was the effect of a split in the original Ethereum blockchain. The split was a result of deception in the Decentralized Autonomous Organization (DAO). This loophole was utilized by hackers who then siphoned off the $50 million value of Ether.
When the hard fork happened, a small community of developers and miners preferred to stick with the original Ethereum blockchain, heading to Ethereum Classic’s creation.
Even though most of the association has moved on from Ethereum Classic, the cryptocurrency has a few advantages like fast and relatively affordable transactions.
Ethereum Classic is also a suitable investment option for those looking to buy in the cryptocurrency space other than Bitcoin.
7. Stellar Lumens (XLM)
Stellar Lumens is a financial products platform generated by Jed McCaleb, the Founder of Ripple. It is comparable to Ripple but works for a different purpose.
Moreover, XLM has bonded itself as a cross-border payments solution that intends to give individuals without an introduction to the banking system a method of transferring funds and access to a store of value while spending minimal transaction fees.
Besides, Stellar Lumens overcomes the problems of slow transaction speeds and high transaction fees, providing an inexpensive transfer method globally.
Stellar Lumens has also partnered with IBM to create IBM World Wire, a global network enabling financial institutions to settle cross-border payments in real-time simultaneously. Jed McCaleb also established the Stellar Foundation in collaboration with the CEO of Stripe, Patrick Collinson.
8. Binance Coin (BNB)
Binance Coin was launched in 2017 and immediately established itself among the top cryptocurrencies in the world. Currently, Binance Coin is the 4th highest cryptocurrency by market capitalization. It is the native crypto of Binance exchange.
Holders can use it to trade in exchange for other assets, like other cryptocurrencies. It started as an ERC-20 token that launched on the Ethereum network.
A freakish feature of Binance Coin is the regular burns of the cryptocurrency. These burns’ final goal is to reduce reserve Binance Coins to 50% of the initial reserve.
9. Monero (XMR)
Monero is an untraceable, secure, and private currency. This open-source cryptocurrency was started in April 2014 and soon garnered considerable interest among the cryptography community and practitioners. The growth of this cryptocurrency is donation-based and community-driven.
Monero has been started with a strong focus on decentralization and scalability, and it facilitates complete privacy by using a different technique called “ring signatures.”
With this technique, there appears an organization of cryptographic signatures, including at least one true participant, but because they all appear valid, the real one cannot be separated. Because of unique security mechanisms like this, Monero has generated something of an unsavory reputation—it has been connected to illegal operations worldwide.
While this is the best candidate for making illegal activities anonymously, the privacy inherent in Monero is also applicable to dissidents of oppressive regimes around the world. As of January 2021, Monero had a market cap of $2.8 billion and a per-token value of $158.37.
As you can see, there are various cryptocurrencies apart from Bitcoin and Ethereum that you should consider.
Bitcoin and Ethereum are the most popular currency, but other cryptocurrencies are much better than Bitcoin and Ethereum in terms of potential ROI.
Furthermore, aside from the above-mentioned altcoins, other crypto from the DeFi space are also worth noting. Also, there are new cryptocurrencies that have made their way into the top spots like Chainlink and Polkadot. However, we did not include them yet as they are relatively new. Nevertheless, they have strong potential, both now and in the future as well.
If you are planning to invest in cryptocurrencies other than Bitcoin and Ethereum, the options we have discussed above are worth considering. Each of them has its different characteristics and its unique use cases.
However, keep in mind that investing in cryptocurrencies is unsafe and not something you should jump into without sufficient research.
Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of CoinQuora. No information in this article should be interpreted as investment advice. CoinQuora encourages all users to do their own research before investing in cryptocurrencies.