The central framework of Bitcoin lies on a technology called blockchain. Without it, Bitcoins can neither be mined nor exchanged properly over a public ledger. It also makes sure that every Bitcoin transaction is secure, and free from potential fraud.
However, there are several major problems with Bitcoin. For one, it only provides a low number of transactions per minute, and requires a high amount of processing power needed for mining. Despite having strong security and providing the public with a revolutionary method of investing in an asset, Bitcoin’s technology isn’t perfect.
The flaws of Bitcoin gave birth to several altcoins that addressed these issues. These alternative cryptocurrencies are potentially seen as Bitcoin’s closest competitors in terms of popularity and use. Top investors who are putting their faith in blockchain are looking at Bitcoin’s potential as the world’s single currency in ten years’ time. However, with Bitcoin’s glaring issues in terms of functionality, and extremely volatile prices in the past few months, becoming an accepted single currency in the near future may be unlikely given the emergence of altcoins that make cryptocurrency transactions and mining easier.
Below are three cryptocurrencies that have the potential to overtake Bitcoin.
Bitcoin Cash is still relatively new to the cryptocurrency market but its scalability was one of the reasons why it was created. When dealing with Bitcoin, users are allowed to transact using a maximum capacity of one megabyte per block. Bitcoin Cash, on the other hand, allows users to use a maximum capacity of 8 megabytes. Why is this important?
The increased capacity of the block sizes allows users to have more transactions to process instantaneously. Bitcoin Cash can have up to 7,000 transactions processing at a time in just one block. Bitcoin, on the other hand, has a cap of only 2,500 transactions per block. In terms of scalability, as the popularity of Bitcoin Cash continues to expand, some see it as a more suitable altcoin to cater to mass adoption. A limit of 2,500 transactions per block takes a long time, especially now that Bitcoin users are growing by the minute.
Litecoin is considered the “silver” to Bitcoin’s gold. This cryptocurrency works just like Bitcoin but mining it requires a little less energy. Considering that there is already a scarcity of graphics cards needed for mining cryptocurrency, this could be a major advantage for Litecoin in the future.
Apart from the fact that they can be mined easier compared to Bitcoin, Litecoin can be transferred quicker from one user to another because of its faster blockchain technology. Bitcoin’s average transaction time is about 9 minutes per transaction, while Litecoin only needs 2.5 minutes to complete a transaction. Because of this, Litecoins are used by plenty of traders who want to move small amounts of money fast.
Bitcoin is mainly used as an exchange of cryptocurrency. While Ethereum is also an altcoin, it is being used by owners in other forms. Ethereum is a platform that runs smart contracts, which are computer codes that can mediate the exchange of not only money but also property, shares, and anything that has value.
Apart from being a tradable cryptocurrency with a market cap of over $34 billion, Ethereum is also used by app developers to pay for services and transaction fees. Ethereum is quickly becoming an independent form of currency within a community that is continuously expanding.