Bitcoin might still be considered the flagship cryptocurrency that many of the other alternative currencies sail in the wake of, but that’s not to say it’s the only viable one. With more than 1,300 different cryptocurrencies out there, knowing which ones to put your money into isn’t easy.
Do you opt for one with a low price so you can buy a lot of them in the hopes of making a fortune? Do you buy the ones with low transaction fees or confirmation times to speed up transfers? We’ll give you the best Bitcoin alternatives based on features and current values. Whether you’re looking to use your cryptocurrency to pay for items online or simply want to put some aside to create a crypto-nest egg, these are the best Bitcoin alternatives.
Readers should note that Digital Trends’ information and opinion should in no way be considered investment advice, and we cannot be held liable for personal or business losses based on market changes or other outside factors.
There’s no sure thing — let the buyer beware
Before we get into actually recommending alternative cryptocurrencies to Bitcoin, we have to make something abundantly clear. Investing in any cryptocurrencies, be they new or established, is more akin to gambling than the traditional stock market. Prices can be extremely volatile, and though we don’t think regulation is going to cause any real problems for the scene, it’s still possible, and nobody knows for sure.
Despite not having the relative reliability of traditional investments, the IRS taxes cryptocurrency holdings in the same way. To clarify, just like if you buy stocks and have them for over a year before selling them, cryptocurrency investors are required to pay long-term capital gains taxes. This official guidance means that any profits you accrue will face a 15% tax rate — individuals making over $425,800 per year and couples making over $479,000 per year pay a 20% tax rate on cryptocurrency earnings.
If you look around online though, you will find plenty of people looking to advise people to invest in “sure things.” It might be something as niche as Dentacoin, or a new initial coin offering looking for funding. That’s not what we’re doing here, and we have no bridges in Brooklyn or Eifel Towers to sell you.
While the ceiling for profit is certainly higher on new cryptocurrencies, which you can pick up at a fraction of a dollar, we review established coins that are less likely to bottom out and ruin your investment. We’ll be looking at verified coins that have proved themselves over time as viable stores of value and transactional mediums.
As much as Bitcoin had a great 2017, Ethereum’s year was just as impressive. It went from a currency worth single digits at the start of the year to being worth more than $1,200 in the early days of the next. It also proved itself to have a higher ceiling (at least for now) than Bitcoin in terms of handling transactions. In early 2018, more than four times the number of Ethereum transactions took place every day, and they happened far faster than Bitcoin. Transaction costs are much lower too, which makes quite a difference when dealing with multiple trades.
Currently, Bitcoin is hovering between $9,000 and $10,000 in value after the latest halving on May 11, 2020, meaning that the reward for mining Bitcoin transactions was reduced by 50%. While there was speculation that this event could lead to single Bitcoin values as high as $50,000, this has not materialized, and the market is still coming to terms with the new reality. Ethereum is valued at around $200 at present, but some analysts predict that it could be worth over $10,000 per coin and gain a 25% market share in the future.
Although some experts we spoke to believe still that Bitcoin will remain the de facto poster child of cryptocurrencies, rising in value and usefulness in the years to come, there’s no denying it faces some difficulties. Ethereum and newer altcoins have fixed some of those potential problems, at least in the short term.
Ethereum hasn’t yet hit the scaling issues that Bitcoin has encountered, sending fees skyrocketing. It also incorporates additional features like smart contracts, which could make Ethereum and its currency, Ether, the preferred cryptocurrency for a variety of industries in the future.
Like many other altcoins on this list, many cryptocurrency investors wish they’d bought a lot of Litecoin at the start of 2017. In January of that year, you could purchase individual Litecoins for $4 a pop, but they grew to more than $350 each at their peak at year’s end. Although there is no guarantee (as with any cryptocurrency) that Litecoin will one day reach or even exceed that height, its relatively low-price at the time of writing (about $43) make it a popular investment choice.
When compared with the likes of Bitcoin, Litecoin is preferable for regular transactions, featuring a block time 75% faster than Bitcoin and transaction fees at a fraction of a dollar. More and more developers and merchants are beginning to accept Litecoin too.
Although Litecoin doesn’t have the same potential as Ethereum in terms of building new transaction platforms, as one of the longest-running cryptocurrencies (created in 2011), it’s an established altcoin with great name recognition. It’s one of the top-10 cryptocurrencies by market cap and has a larger trading volume than all but Bitcoin, Ethereum, and Ripple.
Although Ripple certainly has its detractors for being a somewhat centralized cryptocurrency in a famously decentralized space, there’s no denying that Ripple has some real potential thanks to its rising value and industry support.
Ripple’s value spiked at the end of 2017, moving from around $0.20 in October, to more than $2.50 at year’s end. It often stands out from some of the other large market-value cryptocurrencies, in that it tends to rise when they fall and vice versa.
Ripple and its transactional protocol, XRP, show a lot of potential for those looking to make money from their investment. Given its support from major banking organizations, Ripple has a unique place at the near-top of the cryptocurrency pile. Backed by the likes of Santander, RBC, American Express, and other financial institutions, Ripple technology is already being leveraged by some groups for international wealth transfers. Money Gram announced a partnership with Ripple Labs in 2018 to use XRP for some of its payment flows.
Digital Cash (DASH)
Dash had a similarly positive 2017 to the rest of the major altcoins, rising from $10 per token to more than $1,200 toward year’s end. It’s settled down to around $80 since then, but that represented a considerable rise over 12 months and brought Dash squarely into the top 20 cryptocurrencies in terms of market share.
Originally called Xcoin and then Darkcoin, Dash has been around longer than most, having been officially launched in 2014. It quickly gained popularity early in its lifecycle and has maintained much of it since, for its advocacy of owner privacy, through its PrivateSend function. Effectively acting like an official tumbler, it makes it possible for Dash transactions to be further obfuscated and thereby provide an additional layer of anonymizing privacy for owners.
When compared with Bitcoin, Dash is also much quicker and cheaper when it comes to conducting transactions. Fees at the time of writing are barely two or three cents compared to $2 to $5 for Bitcoin. Thanks to its InstantSend feature, transaction times can be near-instantaneous as well.
A single Monero token is worth around $67 at the time of writing, which is still a significant increase over its roughly $9 value at the start of 2017. Although considered an alternative coin, Monero is based on a different hash algorithm than Bitcoin. This difference ultimately means that Monero has greater privacy for owners as a core component of its technology.
Monero achieves advanced privacy by hiding specific elements of a transaction, like the receiving address and the amount transmitted. That’s somewhat different from Bitcoin, which has an entirely public ledger that makes tracing Bitcoin across the network rather easy, although time-consuming.
For those who like the privatizing elements of Monero, it can facilitate direct purchases from fellow evangelists and on some websites. However, the range of mainstream purchase solutions is limited for the time being.
Much like Monero, ZCash is a cryptocurrency with privacy and owner security as its core tenet. It allows for the obfuscation of transaction details such as sender, recipient, and amount of money. This privacy focus and the general upswing of interest in cryptocurrencies in 2017 saw ZEC rise from around $50 at the start of the year, to near $900 at year’s end.
It has since settled to about $45 at present, but some analysts predict it could increase to $50 to $135 by year’s end. Furthermore, ZCash is increasingly seen as a viable alternative to offshore banking. Depending on the percentage of offshore wealth ZCash can obtain, CCN estimates that by 2025, single coins could be worth as much as $6,000 to $60,000.
Founded in October 2016, ZCash is the youngest cryptocurrency on this list but has shown impressive growth of adoption in that short time. Backed by the ZCash Company, this gives the setup some similarities to Ripple, but its nodes are not privately owned in the same way. Miners should note that 10% of the total potential 21 million ZEC mined throughout the currency’s lifetime will be given to the founders and investors, however.
As a transactional medium, ZCash is far faster and cheaper than Bitcoin, with a block time a quarter that of the more well-known cryptocurrency. With the default transaction fee set at 0.0001 of a ZEC, trades only cost a fraction of a penny.
As even the least meme-familiar among us may remember, the internet was gifted with Kabosu in 2013, the highly critical Shiba Inu now widely known as Doge. What you may not know is that the very same year, two gentlemen named Billy Markus and Jackson Palmer created Dogecoin as a joke cryptocurrency to honor the famous canine. Little did they expect that Dogecoin would become so popular in early 2014 that it’s capitalization reached $60 million.
In 2020, the value of Dogecoin is just fractions of a cent per token. However, the user community surrounding Dogecoin is known for its friendliness and sense of humor, which is not something that can be said of every cryptocurrency. While some hope and speculate that the value may rise to its former lofty heights, Dogecoin is an excellent way for cryptocurrency novices to learn the ropes of mining before moving on to higher-value coins and more significant risks.
- What is Ripple?
- Litecoin vs. Ethereum
- How to buy Ripple
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- Ethereum vs. Bitcoin: What’s the difference?