There are a lot of cryptocurrencies on the digital market, and some can serve as good alternatives to Bitcoin. To spare you some research, we’ve made a list of five of the best Bitcoin alternatives for specific purposes.
- Bitcoin Cash
It’s good to remember that cryptocurrencies can serve different purposes. We’ve tried to find an alternative for every reason one might have to use cryptocurrencies. For instance, Bitcoin Cash is ideal if you’re looking for fast transactions, while Tether offers you a relatively stable investment. Find out how these five coins can serve as great Bitcoin alternatives in the article below.
If you’re interested in cryptocurrency, you’ve probably heard of Bitcoin. There’s a reason why Bitcoin is one of the most well-known cryptocurrencies out there. It was one of the first and most accepted cryptocurrencies in the world. Bitcoin is popular because of its enormous possible profit margins: its value has increased more than a hundredfold since 2013.
But nowadays there are many more different cryptocurrencies. Maybe you’re wondering why you would invest in any cryptocurrencies apart from Bitcoin. The answer is simple: some cryptocurrencies offer more safety and anonymity, possible higher profit margins, quicker transactions, and other benefits.
What are Good Bitcoin Alternatives?
These benefits are nice and all, but what are these Bitcoin alternatives? In this article we delve deeper into five good alternatives to Bitcoin and list their pros and cons. We chose these alternatives with different features and purposes in mind. This way, we came up with a list that has something for everyone. These are the five alternatives we’ll discuss:
- Bitcoin Cash: the alternative for Bitcoin afficionados who want faster transactions
- Monero: a secure and privacy-focused alternative
- Ether: the most popular Bitcoin alternative
- XRP: a relatively safe investment with relatively small price fluctuations
- Tether: the most popular stablecoin
Below you can read why we picked these currencies and which purposes they might serve.
Bitcoin Cash: a Quick, Scalable Bitcoin Alternative
Lets start with a cryptocurrency with almost the same name as Bitcoin: Bitcoin Cash. This alternative was created as a project by (former) Bitcoinminers and computer scientists that were unhappy with the speed of Bitcoin transactions and, with that, the long-term potential of Bitcoin. By way of a so-called “hard fork”(a radical change in the Bitcoin network protocol) they created Bitcoin Cash.
Bitcoin Cash Pros
The most prominent benefit of Bitcoin Cash is the speed at which transactions can be approved and completed. A lot of cryptocurrencies, among which Bitcoin, use a procedure called cryptomining. This means that every transaction needs to be verified by several “cryptominers”. This happens with every “block” of transactions and means that the miners offer their hardware for a series of complicated calculations. The theory behind this is that it decentralizes Bitcoin and keeps it fair and fraud-free.
The problem is that this process takes a relatively long time. Bitcoin can only process seven transactions per second. For your comparison: Bitcoin Cash can process 116 transactions per second. This speed is an important advantage of Bitcoin Cash, especially if you use cryptocurrencies for a lot of transactions. To put it differently, Bitcoin Cash has the potential to grow and become an good investment.
But what if you are looking for a crypto as an investment instead of a private online payment method? Bitcoin Cash also has an advantage in that department: scalability. The fact that Bitcoin Cash can handle more transactions every second means it has the potential to grow without it causing problems with its speed. This potential to grow makes it more interesting as an investment.
Bitcoin Cash Cons
The downsides to Bitcoin Cash are threefold. First of all, Bitcoin Cash is simply used a lot less than Bitcoin. Although it is a “hard fork” of Bitcoin, there aren’t a lot of online stores that will accept Bitcoin Cash. In addition, Bitcoin Cash has no other function that makes the cryptocurrency popular or necessary. Other alternatives on this list do have this. Ether, for example, is the fuel of the groundbreaking Ethereum network, while Ripple is often used for international payments. Bitcoin Cash lacks a unique application.
The second drawback is closely connected to the first: investors find it difficult to have a lot of faith in the currency. This is partly down to the reason above, combined with the fact that Bitcoin Cash hasn’t really acquired its own identity (yet). This could mean that investing in Bitcoin Cash may not be a good move.
Finally, many critics see the technology that Bitcoin Cash uses as more of an interim solution, rather than the way to end Bitcoin’s biggest problems: speed and scalability. This in itself makes sense. Of course, 116 transactions per second compared to Bitcoin’s seven seems like a lot, but if you’re wondering whether Bitcoin Cash has enough potential to become the new dollar, the answer is no.
Monero: A Privacy-Focused Alternative
If privacy is something you hold dear, Monero is definitely worth considering. Monero uses special technology to ensure that the sender, receiver, and the amount of transferred cryptocurrency remain hidden.
To connect to the Monero network so you can buy, sell, and spend Monero, users need a so-called Monero wallet. Various Monero wallets are available for all common operating systems. You can find a few on the Monero website.
The big advantage of Monero is their focus on privacy. Of course there are more cryptocoins that focus on privacy, but what makes Monero so special is that the privacy is “always on” and users cannot endanger it. With many cryptocurrencies, external parties can give crypto users a so-called penalty if their settings ensure the Blockchain isn’t transparent. This often leads to a lack of use of important privacy options. This isn’t the case with Monero, because the privacy options of this coin can’t be turned off.
Despite Monero’s advantages in terms of privacy, this cryptocoin has some drawbacks as well. The first drawback is directly related to Monero’s biggest advantage: privacy. Guaranteeing privacy with Monero’s advanced techniques takes a lot of (RAM) memory – about eight times as much as a Bitcoin transaction. While users with decent hardware probably won’t be bothered by this, it’s still important to be aware of it.
Other disadvantages of Monero are the fact that Monero is used by criminals relatively often because of its anonymity (so be careful who you do business with!) and that Monero isn’t accepted in as many places as Bitcoin.
There are three ways to obtain Monero coins: via cryptomining, by working for Monero, or by buying Monero with “real” money. As soon as you have some Monero in your possession, you can check out this page to see which online stores accept Monero.
Note: an advantage of Monero is that you can mine it relatively easily, without expensive hardware. However, this also means that cyber criminals might try to cryptojack your computer so they can use it to mine their Monero. Read this article to learn exactly what this means and how to prevent it.
Ether: A Popular and Fast Alternative
Save for Bitcoin, Ether is the most popular cryptocoin in the world. Yet Ether’s market share is only 1/10th that of Bitcoin. Don’t let these numbers discourage you, though. As a crypto currency, Ether has a good set of properties and offers some major advantages.
Ether is the currency used within the increasingly popular Ethereum. This is a network of applications, financial services, game/digital media distributors, and so on. Ethereum presents itself as a kind of financial network available to anyone with an internet connection. The crucial pivot in this network is the Ether coin.
A big advantage of Ethereum (the network that Ether is an important part of) is the principle of “smart contracts”. This means that no intermediary is needed to ensure that the transaction is conducted fairly and in accordance with the terms and conditions of both parties. Instead, the agreements about the transaction are put into code and the transaction is carried out independently. In that sense, the use of Ether is actually the same as when you put a five euro note in someone’s hand in exchange for a service or product: honest (crossover) and transparent. In theory, this is also possible with Bitcoin, but this would take a special programming language. With Ether it’s a standard feature.
The principle of smart contracts offers another plus. It isn’t just a transaction, after all. Ethereum also provides financial services. Suppose you are a freelancer but want more security in times of less financial stability. Ethereum’s “smart contract” technology makes it possible to see how much income you had in a particular month, based on a data-sheet analysis. Then, depending on your agreement, the program might automatically transfer Ether to you to make up for your bad month.
Another big advantage of Ether is the speed at which transactions take place: Ethereum transactions generally take place within a few seconds. With Bitcoin, it usually takes a few minutes.
Finally, Ether can also be interesting for investors who want to achieve large profit margins in a short time. This cryptocoin is already popular and is rapidly growing. Keep in mind that Ether, like all cryptocurrencies, can drop significantly if it has a setback.
The biggest disadvantage of Ether is that you can’t spend Ether coins in as many places as you can pay with Bitcoin. As of now, Bitcoin still is the standard among cryptocurrencies. Thus, if you mainly want to use cryptocurrencies to anonymously and easily pay for things online, this is something to keep in mind. For a list of places that accept Ether as a payment method, you can check out this page.
Another disadvantage of Ether has to do with Ether as an investment. Unlike Bitcoin and many other cryptocurrencies, Ether has not yet defined a fixed amount of cryptocurrency after which the network will no longer expand. If this remains the case, and Ether continues to grow, you’ll never get a scarcity effect as there will eventually be with Bitcoin. Because of this, you won’t see this kind of deflation and Ether investors will potentially miss the opportunity to experience the explosive financial growth that can accompany it.
XRP: A Safe Investment
The cryptocurrency XRP is a very different kind of cryptocurrency compared to Bitcoin and other cryptocoins on this list. XRP, often referred to as “Ripple” (the parent company’s name) is more a means of sending money than a form of money in itself. Ripple makes it possible to efficiently and quickly exchange money internationally. With XRP, this often only takes a matter of seconds. In addition, XRP also charges relatively small commissions for transactions, especially compared to Bitcoin.
For the reasons mentioned above, Ripple is mostly used by banks. Imagine you want to transfer 1000 euros from a European bank account to a family member in the US. This is possible through your own bank, but will take a couple of days, and you’ll have to pay transaction fees. With Ripple, this works differently: the money is converted to XRP and sent to the receiver through the Ripple network. The receiver can choose whether to accept the money in dollars, another currency, or XRP.
XRP makes it easy to transfer money, but that doesn’t mean you can’t also use it in various web shops. However, this doesn’t seem to be its main use for many people, probably because it’s not as widely accepted as Bitcoin.
Another great advantage of Ripple is that it’s a relatively safe long-term investment. This is partly because a lot of banks support this cryptocurrency. Ripple creates a bridge between traditional currency and cryptocurrency. Moreover, Ripple has a set number of coins, which means they won’t introduce any new coins to the market. Ripple coins will become scarcer. Therefore, the expectancy is that their value will increase in the long run. Besides, investing in Ripple doesn’t take a large sum of money. At the time of writing, one XRP is worth about 25 cents, which means you can buy 400 coins for a mere 50 euros.
Despite all the advantages, XRP isn’t perfect and there are some disadvantages worth mentioning. Firstly, it’s important to mention that a large part of all XRP coins currently belongs to just a few important people within the Ripple company. Among experts this is cause for concern, as it could lead to overinflation. This is the last thing you want when you’re investing, because it means that the cryptocurrency will decrease in worth.
Another problem that stands in the way of XRP becoming a good (long-term) investment is the strong competition it faces. XRP doesn’t just compete with other strong cryptos like Bitcoin and Ether, but also has to deal with the competition of the world’s most common money transfer system in the world: SWIFT.
Finally, XRP has another problem that doesn’t have to do with investing: XRP isn’t as easy to spend as Bitcoin. Most web shops don’t accept XRP (yet), while they do allow people to pay with Bitcoin and Ether.
Tether: the Most Popular Stablecoin
Tether’s main difference from traditional cryptocurrencies is stability. This cryptocoin is what they call a stablecoin. In fact, it’s the most popular stablecoin of this moment. This means that, compared to other cryptocoins, Tether keeps its value and is less subject to price fluctuations. Stablecoins are able to hold their value because they are tied to a so-called reserve. A reserve could be a regular currency or gold. Tether is tied to dollars, euros, Chinese Yuan, gold, and, if Tether has its way, soon also the Japanese Yen.
The biggest advantage of Tether over other coins, like Bitcoin, is of course its stability. If we look at the graph on Investing.com, we see that Tether always preserves its value, which is about one dollar.
This way, Tether combines the best aspects of both traditional money and cryptocurrencies. It allows you to transfer money quickly, safely, and privately all while its rate remains relatively stable. Moreover, Tether is the most used and most popular stablecoin at this moment. Consequently, you can spend your hard-earned Tether in a lot of places. Click here for a list of the large amount of web shops, cryptoservices, and other websites that accept Tether.
While Tether knows a lot of advantages, there are also disadvantages to using this coin. The biggest disadvantage has to be the controversy surrounding Tether for the last couple of years. Tether was criticized for never undergoing an official financial inspection by a certified accountant. This is needed to proof that they have enough reserve to guarantee that one Tether will remain approximately equal to one dollar.
Tether has had one of the most successful law firms in the US (FSS) investigate their services. However, even this law firm states that the research they did does not equal an official financial inspection by an accountant. Moreover, the investigation was done on 1 June 2018 and Tether has grown considerably since then. In other words, we can’t be sure whether this stablecoin really has enough reserves. If it every comes out that they don’t, this breach of trust could cause the Tether to collapse.
Conclusion: The Five Best Bitcoin Alternatives
If you’re looking for an alternative to Bitcoin, there are a lot of options. Based on our research of the pros and cons of different coins, we can recommend the following five Bitcoin alternatives:
- Bitcoin Cash for Bitcoin lovers that want fast transactions.
- Monero for users that want more privacy.
- Ethereum for those who want to be part of potentially “the next best thing” in the crypto world.
- XRP for people looking for a relatively safe investment.
- Tether for crypto users who want to try out a stablecoin.
Of course, these are merely a few options in a sea of different cryptocurrencies. Even so, they can serve as a nice start to your discovery of the world of crypto.
Do you have a specific question about Bitcoin alternatives? Look at the FAQ below to see whether your question is there. If that’s not the case, please leave a comment and we will get back to you.
A simple, but certainly not 100% complete definition of cryptocurrency is this: a cryptocurrency is a digital, alternative payment method that is usually decentralized, meaning it isn’t under the control of one central bank or authority. Bitcoin is the pioneer of cryptocurrency as well as the most well-known cryptocurrency. It’s difficult to give an exact definition of cryptocurrency, because there are so many kinds and they all have different characteristics and purposes. If you want to know more about cryptocurrency in general, we therefore recommend you read our article about the five best Bitcoin alternatives. Have a look at this article if you want to know more about Bitcoin specifically.
There are several reasons why you might want to consider other cryptocurrencies. For example, some cryptocurrencies offer faster transactions or a slightly more stable price. Others might be based on smart technologies such as “smart contracts”, which could make them very useful and valuable in the future. To learn more about these and other reasons for considering crypto coins other than Bitcoin, read this article.
You can’t use all alternatives to Bitcoin everywhere. This is one of the major disadvantages of alternative crypto coins (that aren’t Bitcoin). Even Bitcoin, by far the most popular crypto currency, can’t be used in all web shops. With alternative cryptocurrencies, the chance that you’ll be able to use it to pay at your favorite webshop is a lot smaller.