Altcoins emerged as an alternative to Bitcoin’s high volatility and mining complexity. Although the first cryptocurrency is now a catalyst in the industry and powered up innovation for developers to create unique assets, Bitcoin’s difficulty turned investors to cheaper and faster alternatives.
However, since there are numerous altcoin projects on the market, most investors prefer adding Bitcoin as well to their portfolios to spread out risk. That’s because, despite their technological advancements and high potential rewards, altcoins can be prone to scams or other risks.
Altcoins have various use cases. Ethereum has smart contract functionalities for creating decentralized applications, while Solana is the fastest blockchain solution. There’s also Dogecoin, the meme coin whose popularity surged due to celebrities like Elon Musk pumping the Dogecoin price overnight.
Let’s see what are the best current altcoin projects and why you should keep an eye on them.
Ethereum
Ethereum is more than an altcoin ―it’s also a revolutionary blockchain solution. Vitalik Buterin introduced the concept in 2014, inspired by Bitcoin’s white paper. The following year, he and Joe Lubin launched the platform focused on blockchain technology, propelling Ether into the mainstream.
Now, Ether is the second-largest cryptocurrency on the crypto market by market value, behind Bitcoin. In addition to investors, developers use it within Ethereum-based ecosystems, such as dApps, DAOs, NFTs, and DEXs.
The Ethereum blockchain has become a vehicle for innovation. Due to challenges with scalability, security, and gas fees, Vitalik Buterin established a roadmap plan that includes six main updates and numerous hard forks. Each would tackle a specific problem to make the blockchain the perfect tool for the Web3 world.
The Ethereum Merge update focused on transitioning the consensus mechanism from proof of work to proof of stake, reducing the network’s energy costs by 99% and making it one of the most sustainable blockchains in the competition.
Solana
Solana is one of Ethereum’s primary opponents. The Solana Foundation launched it in 2017, while Solana Labs worked on the blockchain solution. The altcoin impressed through its rapid adoption due to its low transaction fees and fast transaction times.
Solana uses a unique consensus mechanism, along with proof of stake, compared to Bitcoin and Ethereum. Proof of history allows Solana to process about 65,000 transactions per second, whereas Bitcoin reaches up to ten TPS and Ethereum up to 15.
Solana also has smart contract functionalities for creating dApps and NFTs. Therefore, many developers and investors switched to Solana from Ethereum. However, the lack of media coverage didn’t help the altcoin become popular.
Despite its advantages, Solana has also experienced issues with network outages and disruptions, which have pushed away investors. Still, the blockchain got back on track by stabilizing the network performance and regaining interest from investors.
Dogecoin
Dogecoin is an altcoin and a meme coin because its creation is based on the famous Doge meme on the internet. Jackson Palmer and Billy Markus created the cryptocurrency as a joke in 2013, but they were soon surprised to see how its value would increase a few years later.
The crypto exchange Binance was the first to list Dogecoin in 2019, boosting its market
capitalization. Its use cases are similar to those of other altcoins, including online purchases and trading, but its significance for the meme and investor community made it valuable.
Dogecoin became even more popular when Elon Musk tweeted about it, driving the prices up in only a few hours. Since then, more prominent investors have endorsed Doge, and its value has fluctuated since.
Dogecoin is primarily helpful for tipping digital artists online who create NFTs and indie games on the blockchain. Considering its value explodes occasionally, it’s an excellent way for artists to have a passive income portfolio.
BNB
The Binance coin is a cryptocurrency enabled by the Binance exchange. BNB became an official altcoin in 2017 when its purpose was to serve as a discounted trading fee. However, its importance in the market soon increased, so its use cases multiplied.
While users mostly use it to pay transaction fees on the exchange and the Binance Chain, BNB is also great for payments, booking travel accommodations, entertainment, and online services. It also allows users to invest in ICOs through the Binance Launchpad program.
The BNB coin has a special burning system. About every quarter, one-fifth of the company’s profits are used to burn BNB in the treasury. The technology reduces the coin supply to increase its value and also ensures more transparency and predictability.
The BNB Chain is also a notable solution in the crypto environment, as developers leverage its features of Layer 1 and Layer 2 solutions to contribute to the establishment of Web3. The blockchain has great EVM compatibility, diversified APIs, and an impressive ecosystem.
Cardano
Cardano is another Ethereum killer. It’s one of the most efficient blockchain solutions on the market, using the proof-of-stake consensus mechanism. The altcoin is called ADA and has helped developers enable their decentralized applications on the blockchain.
An Ethereum co-founder, Charles Hoskinson, created Cardano and launched it in 2017. The third-generation platform became popular because it sought full decentralization, especially when it transitioned to the federated Byzantine Fault Tolerance (fBFT) consensus mechanism.
Staking ADA on the blockchain has become a great reward for validators in either public or private pools, which operators from the Cardano technical team power. This makes it easy to stake ADA and contribute to its safety.
Cardano is continuously evolving and going through various “eras” of innovation. The latest step, Voltaire, will bring treasury management and voting on the blockchain-based on smart contracts. Therefore, its future is bright, although it’ll have to surpass Ethereum in popularity.
What do you think about these altcoins?
Altcoins are popular alternatives to Bitcoin because they’re easier to acquire, trade, and use. As the first cryptocurrency has become more difficult to buy due to its massive value, users turn to altcoins like Ethereum, Solana, and the BNB coin for faster transaction rates and lower gas fees. In addition, altcoins are powering up innovations in the crypto ecosystem.