The race of cryptocurrencies started 9 years ago. Bitcoin was the first participant and even after 1,800 other cryptos have joined the race, bitcoin is still winning it till now.
If the words are to be believed, Bitcoin has reached the sky. Many investors believe that it is a bubble and sooner or later, the story will end badly in tears. While it is there, it might make many people a good fortune. But, what will happen when another crypto with better features than bitcoin takes over?
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Before that, let’s see what are the disadvantages of the current leader which can dethrone it:
The Problems with Bitcoin
1. Energy Consumption
The amount of electricity that is used for each bitcoin transaction is nearly 236 KWh, which is enough power to run 8 US households for an entire day.
Considering this, bitcoin will use more electricity per year than an entire country like Nigeria in the coming years, as the minimum no. of transactions are around 300,000 and it keeps on increasing.
Apart from the hole in the pocket, this damages the environment at an alarming rate. This, in turn, will lead to a more centralized blockchain, where the rules of bitcoin can be changed according to their wishes.
2. Scalability Issues
Apart from energy consumption hindering the growth, the other issue is that due to so much power consumption, this will limit the distributed miners globally and give more control to the dominant mining pools/farms.
Since the supply of bitcoin is limited, capped at 21 million, bitcoin’s supply will eventually run out and when it does, miners will no longer receive rewards but instead, charge fees which will be relatively higher and hence many people will stop using the blockchain.
It majorly depends on the miners too. The growth story of bitcoin will suffer if miners decide that it is too expensive and uneconomical for them to process the transaction and so, they will be benefitted more if they use their computing power elsewhere, mostly because of the slow speed.
3. The Unknown Future
Now, you must be thinking that why does bitcoin has market dominance if it has so many disadvantages? The reason is it was the first and the most trending crypto. Also, the price of bitcoin has a direct correlation to the number of google searches.
Bitcoin is not a superior blockchain. As of now, there are many cryptos in the market that are cheaper, fast, and more productive.
Bitcoin is not bought or stored by people as a currency, but as a commodity through which they want to make fortune but most of them are not sure about how or when that will happen.
Once the bitcoin bubble reaches its peak and people start panic selling, it will inevitably crash as Bitcoin’s price is determined by demand vs. supply.
Among the 1,800 cryptos, there are many that have the potential to beat bitcoin in the race. Let’s read and understand what other cryptos are out there:
What is Ethereum?
Vitalik Buterin created Ethereum in 2015. Apart from being a decentralized cryptocurrency (like Bitcoin), Vitalik Buterin’s crypto also allows decentralized applications to be created on its blockchain that uses smart contact.
The whole idea of blockchain is to remove the power from the third parties which control as well as charge you for maintaining your account and thus, allow you to control your own data.
Why is a decentralized application beneficial?
Because a third party is not involved here, this reduces the fraud and other risks-related issues very efficiently. Here, you control the amount of information you give and once verified, the funds can be received or sent directly through smart contact without having to pay a third party.
It is also worth noting that Ethereum is also vastly quicker than BTC, the average block time being 15 seconds for Ethereum as opposed to 10 minutes for BTC. Ethereum is a second generation blockchain and the implementation of smart contracts and decentralized applications makes it a far more valuable investment. As a result, it has grown to be the second best crypto after bitcoin in just a span of 2-3 years.
Lite Coin (LTC)
What is a lite coin?
LiteCoin is a peer-to-peer Internet currency that allows to carry out instant, near-zero cost payments to anyone in the world. It is worth noting that Litecoin was never intended to replace Bitcoin but was created to compliment it. Like silver compliments gold.
The biggest advantage in using Lite coin over bitcoin is that Bitcoin transaction confirmation time is 10 minutes while Litecoin’s is only 2.5 minutes. So, because of its faster transaction confirmation time, Litecoin is able to process a higher volume of transactions.
Other Worthy Cryptocurrencies are:
A decentralized and open-source cryptocurrency launched in the latter part of 2016, Zcash has shown promising figures. They define themselves with the example of HTTP and https.
They said that if Bitcoin is like HTTP for money, Zcash is https. Thus, like https, Zcash claims to provide extra security or privacy as they offer selective transparency of transactions.
A more secretive version of Bitcoin, Dash (originally known as Darkcoin) offers more anonymity. It works on a network that literally makes transactions almost undetectable.
Launched in January 2014, Dash has experienced an increasing fan following in a short span of time.
Their motto being allowing frictionless transfers to send money globally, Ripple is a real-time global settlement network that offers instant, certain, and low-cost international payments.
Released in 2012, Ripple currency has a market capitalization of $1.26 billion. One distinct feature of Ripple is that unlike other cryptos, it does not require mining and hence saves a lot of computing power and minimizes network tension.
Observing what the current trend tells us, it seems these digital form of money, i.e., cryptocurrencies will stay, but only time will tell how many of them will be successful in the long run in the face of growing competition.
In the ever-changing world, no one knows for sure what is the next big thing. The only way through which we can make the right choice and utilize the right opportunity is by observing, increasing our knowledge, and taking affordable risks.