When we talk about cryptocurrencies it seems like the most important are Bitcoins. But, according to the financial ups and downs, which cryptocurrency compares to Bitcoin? Is there any chance that some cryptocurrency takes Bitcoin’s place? Bitcoin has not simply been a leader in the world of cryptocurrencies. It has built on a decentralized peer-to-peer system. Yet, it’s not a standard for cryptocurrencies. It inspiring an ever-growing group of supporters and spinoffs.
In this article, we going to explore some cryptocurrencies choices like Bitcoins. So, keep reading about cryptocurrency compares. And take note of which ones you prefer the most.
What considers when another cryptocurrency compares with Bitcoins?
According to Investopedia, “while some of these currencies may have impressive features that Bitcoin does not.” For example, matching the level of security that Bitcoin’s networks achieve. Also, this has no seen yet in an altcoin.
First of all, cryptocurrencies are designed to be free from government control. Although as they have grown more popular, this aspect of the industry remains in focus. Second, currencies modeled after Bitcoin have often tried to present as improved versions. For instance, altcoins or even “shitcoins”.
However, it doesn’t mean that there’s no other way than Bitcoins. It should be noted that some media have confused Bitcoin with forms of electronic money. That’s with more procedures used in many low-income countries to reach the unbanked.
But the two systems are very different from each other and should not be conflated. In this note, we provide information about Bitcoin and compare it with e-money. And we do so to prevent alarms about the former from harming the latter.
When cryptocurrency compares to e-money
It’s so usual to compare Bitcoins with e-money. Apart from the digital format, there are few similarities between Bitcoin and e-money. E-money is a digital format of the common currency. For example, credit and debit cards, PayPal, and wire transfers. In other words, it is a mechanism by which you interact with that traditional currency.
And to protect the consumer, the cash backing the electronic money is deposited in a regular bank. Unlike Bitcoin, e-money is not an individual currency. It’s supervised by the same authority that controls the national currency backing it. So let’s find out more details about what cryptocurrency compares.
Comparison between e-money and Bitcoin
These are some relevant differences when we talk about cryptocurrency compares. Information based on data from, European Central Bank:
- Format: digital
- Unit of account: fiduciary currencies (USD, EUR, KES)
- Customer identification: Financial Action Task Force (FATF) for customer identification apply. Although these standards allow for simplified measures for lower-risk financial products
- Means of production: issued digitally backed by the central authority’s fiat currency.
- Issuer: legally-established e-money issuer (which may be a financial institution)
- Format: digital
- Unit of account: Bitcoins (BTC)
- Customer identification: anonymous
- Means of production: mathematically extracted/generated
- Issuer: a community of persons/miners
In the next part, we going to show you a list of cryptocurrencies compares to Bitcoin.
Some of the most relevant cryptocurrencies other than Bitcoins
It’s not an easy task to compare between several cryptocurrencies and Bitcoins. First of all, it’s almost impossible in a list like this to address the most similarities. For instance, the fact that there are more than 4,000 cryptocurrencies in actuality. Secondly, many of these currencies have few to no following or trading volume. Also, some enjoy a gigantic reputation among dedicated associations of investors.
But beyond that, the range of cryptos is always growing. And it’s not going to be a surprise that the next great cryptocurrency appears very soon. That’s to say, while Bitcoin is a forerunner in the area, analysts adopt ways for other cryptos. For instance, analysts tend to attribute a great deal of importance to the ranking of coins. And they do so dependently on one another market cap. So, let’s check some cryptocurrency compares to the “almighty” Bitcoin:
Also known as LTC, it was one of the first cryptocurrencies to follow in Bitcoin’s footsteps. It has come to be co-referred to as “the silver to Bitcoin’s gold”. Although resembles Bitcoin in many ways, it has a faster block generation rate. It also offers a faster transaction confirmation time. There are even more and more merchants accepting Litecoin. As of January 2021, Litecoin had a market capitalization of $10.1 billion. And a value per token of $153.88. This makes it the sixth-largest cryptocurrency in the world.
It’s known as ETH. And it consists of a decentralized software platform that allows executing smart contracts. Ether is currently the second-largest digital currency by market capitalization after Bitcoin. Although it trails it by a significant margin. As of January 2021, ETH’s market cap is nearly 19% of Bitcoin’s size.
Later this year ETH plans to change its consensus algorithm. This change will allow its network to run itself on much less power. Besides improving the speed of transactions. This is an alternative to Bitcoin’s proof-of-work mechanism. Because that means the miners will receive more Bitcoin for processing transactions.
Better known as BCH and holds an important place in the history of altcoins. And this is because it is one of the first and most effective branchings of the original Bitcoin. This happens as a result of debates and discussions between developers and miners. Then, when an agreement cannot be reached, sometimes the digital currency is split. And the original chain stays true to its original code. In turn, the new chain starts its life as a new version with changes in its code.
The big difference between Bitcoin Cash with Bitcoin is scalability. For example, the Bitcoin network has a block size limit of one megabyte (MB). Meanwhile, BCH increases the block size from one MB to eight MB. That is, to contain more transactions within them. And the transaction speed would increase. It also makes other changes. For instance, the elimination of the Segregated Witness protocol that affects block spacing.
If another cryptocurrency compares with Bitcoin, it’s possible to create a better one?
This can happen. For now, Bitcoin remains by far the most popular decentralized virtual currency. But there are no guarantees that it will maintain that position in the future. There are currently many alternative currencies inspired by Bitcoin. However, they need significant improvements to surpass Bitcoin. At least having an established market. Although this aspect is unpredictable. It’s also possible for Bitcoin to adopt improvements from other currencies. That’s to say, as long as they do not involve a modification of fundamental parts of the protocol.
Any more ideas or points of view about cryptocurrency compares with Bitcoin? Let us know in the comment section.