When it comes to the cryptocurrencies, Bitcoin is regarded as the king in the stable. It was the first cryptocurrency that debuted in the market to end the dominance of Fiat currencies and since its inception, Bitcoin continues to remain the largest cryptocurrency by market capitalization. It has already covered a decade long journey in its life cycle and witnessed many highs and lows.
Bitcoin and Altcoins
With time, however, other digital currencies also came into the market as the blockchain technology continued to evolve. All these new digital coins are called “altcoins” and although the technology of decentralization remains at the heart of each cryptocurrency, altcoins come with the added convenience of enhanced functionality owing to more number of used case scenarios. Take, for instance, the second-largest cryptocurrency by market capitalization, Ethereum which although operates on the same principle decentralization and peer-to-peer networking but comes with the added functionality of smart contracts. This smart contract feature allows Ethereum to execute the contract between two parties automatically using the open ledger technology. Similarly, we have several different applications and use cases for different altcoins, which help them to find their unique positioning against Bitcoin although fundamentally all digital coins work on the same principle.
Transaction Speed and Mining
Another important difference between Bitcoin and altcoins is the superior ability of the latter to handle a large number of transactions compared to Bitcoin. The process of verifying transactions in case of Bitcoin (which is also known as mining) is quite expensive and resource-intensive. However, altcoins use more innovative and affordable method for verifying transactions and hence, come across as a faster and affordable way of completing transactions. Consider the examples of altcoins like Dash and Ripple, which are known for their unique positioning vis-à-vis Bitcoin. Dash is focused on the speed and claims to process one transaction per second which is quite phenomenal compare to other altcoins as well as Bitcoin. Ripple, on the other hand, has focused on cross border transactions and offers a unique and convenient way of transferring the money between large institutions and organizations across borders.
Therefore, by focusing on some unique aspects and functionality, these altcoins have made a special place in the crypto sphere. In sum, both Bitcoin and altcoins work on the same blockchain technology; however, they differ on the aspects of functionality, transmission speed, and cost factor involved in the transactional process.