What Are the Best Alternatives to Bitcoin?

Bitcoin is one of the most commonly known cryptocurrencies, and in some cases it has even become synonymous with the term cryptocurrency. However, there are many alternatives out there for you to investigate. Investing in cryptocurrency does not mean that you have to buy Bitcoin. You could, equally, decide to invest in one of the following alternatives.

Ethereum is one of the most common alternatives to Bitcoin that people tend to opt for. It was initially released in 2015 and is a decentralized and open-source blockchain. The ultimate goal with its launch was to create a platform and a suite of decentralized products that anyone would be able to access, regardless of where they were in the world and who they might be.

The Ethereum blockchain is used for the trading of NFTs. Though its market cap is less than half of Bitcoin, it is still the second-largest digital currency that you could opt for. In 2021, the team behind Ethereum transitioned its consensus algorithm from a proof-of-work system to one of proof-of-stake. Ultimately, this change meant that the more coins a miner owned, the more they would then be able to mine. It has helped to secure the network and allows it to run with far less energy, plus an improved transaction speed.

Launched in 2011, Litecoin was one of the first alternatives to Bitcoin. It is another decentralized currency that uses an open-source global payment network. Litecoin and Bitcoin are incredibly similar to one another, but there are some key differences between the two. Litecoin aims to process its blocks much faster than Bitcoin. Ultimately, it processes blocks in 2.5 minutes. This is a far speedier transaction than Bitcoin’s 10 minutes.

Litecoin also uses a password-based key derivation function called scrypt as part of its proof-of-work algorithm. This makes mining for Litecoin a little more complicated and more expensive when using FPGA and ASIC devices.

Dogecoin was developed in 2013 by Jackson Palmer and Billy Markus. It was supposed to initially be a joke that poked fun at some of the speculation surrounding cryptocurrencies at the time. The name of the cryptocurrency came from the Doge Internet meme, with the Shiba Inu at the heart of the meme serving as the logo of the cryptocurrency.

While it was meant to be a joke, many view investing in Dogecoin to be as legitimate as any other form of cryptocurrency investment. It has a loyal online community which includes entrepreneur and business magnate Elon Musk. He has been instrumental in boosting the popularity of the cryptocurrency over the past few years. After tweets from him, fluctuations in favor of the price of Dogecoin can often be seen in the markets. This has led to him being accused of market manipulation but, since cryptocurrencies are not yet regulated in the same way that the stock market is, these actions are actually allowed.

Cardano is the largest cryptocurrency to use proof-of-stack blockchain, and is another open-source and decentralized platform. Peer-to-peer transactions are handled using its internal cryptocurrency named ADA. The proof-of-stake protocol for Cardano is named Ouroboros.

This platform was founded by Charles Hoskinson. He was one of the founders of Ethereum, but left over some disagreements over where the platform was headed. The platform is named after Italian polymath Gerolamo Cardano, and ADA is named after Ada Lovelace. Many of the systems are driven by intense peer-reviewed research. While the team needs to do some serious work to improve their financial products, their work to further their proof-of-stake consensus model means that they are rising above other more well-established cryptocurrencies like Ethereum.

Polkadot is pretty unique in the marketplace as it is aimed at delivering an architecture that can be shared between different systems. It is designed to help connect different blockchains across the Internet and allow them to work together under the one roof.

It also allows for the creation of "parachains." These are parallel blockchains that have their own native tokens that can communicate with each other. This platform also uses the proof-of-stake model, considered to be far more environmentally friendly than others that you could choose to use.

When many people decide that they wish to look into cryptocurrencies, they decide to start with Bitcoin. This is understandable, as it is one of the biggest and there are plenty of resources that can help you to learn about it. However, there are a few advantages to investing in some of the alternatives to Bitcoin, like those we listed above.

Primarily, they allow people to explore other systems and uses for blockchain beyond what Bitcoin can offer. Even looking into proof-of-stake systems over proof-of-work ones will allow you to discover so much. Choosing to invest in alternatives to Bitcoin also means that you will get to diversify your cryptocurrency portfolio. The markets for cryptocurrencies are not always the most stable, and as Elon Musk has demonstrated many times, it does not take much to get them to shift. Investing in some alternatives to Bitcoin will help to spread your investments and will hopefully stabilize them a little.