Over the years, bitcoin has established itself as the leader of all cryptocurrencies. It is the first established digital currency and is of the highest value in the market. As a result, it is not uncommon for its use as a synonym for cryptocurrency. But, many other digital currencies, referred to as altcoins, have emerged in the market.
The term altcoins refer to the alternative virtual coins other than bitcoin. Any other cryptocurrency in the market can be an altcoin. It does not matter whether it has the same function or purpose as bitcoin. Each altcoin consists of different features. They also operate to serve various roles within the crypto community. This article will discuss whether there is any other digital currency that is not an altcoin.
Is there any alternative to bitcoin that is not an altcoin?
There are over 5000+altcoins available on the cryptocurrency market. It is quite a daunting task to research them all. Some popular altcoins include Litecoin, Dash, Ripple, Bitcoin Cash, Monero, and Ethereum.
But, many experts in the crypto world believe that ethereum is not an altcoin. For many years now, ethereum is the only digital currency that has come close to challenging bitcoin’s prominence in the crypto market. Is it possible that ethereum is not an altcoin?
How do you classify altcoins?
Bitcoin is the first cryptocurrency to emerge and embrace peer-to-peer payments. In turn, it has paved the way for many other cryptocurrencies. The creation of altcoins was to aim at providing better replacements for bitcoin. Since most of them rely on the same blockchain technology as bitcoin, their primary role is to improve or complement bitcoin’s advantages.
One of the main ways to classify altcoins is by finding out how they relate to each other. For instance, many altcoins began through bitcoin forks. These are the splits that occur in a transaction chain. Thus, this leads to new versions of bitcoin, better known as altcoins.
Yet, every altcoin has different features from the other. These features include transaction management, scripting language, mining mechanism, and consensus algorithms. Due to these differences, each altcoin has unique characteristics and advantages to bitcoin.
Another major classification of altcoins is through market capitalization. The value of altcoins relies on bitcoin’s value. Bitcoin is still the most prominent cryptocurrency. Ethereum follows, then Ripple, and then Litecoin, according to CoinMarketCap.
So, why is ethereum is not an altcoin?
Ethereum’s creation was in 2015 by Vitalik Buterin. It is a decentralized, blockchain-based, and open-source software platform. It uses its own cryptocurrency, ether, which is like bitcoin works in the bitcoin network. Like bitcoin, ether can provide peer-to-peer payments. It also eases the deployment of decentralized applications through back-end codes.
Ether facilitates the creation and employment of smart contracts. These contracts execute a specific output upon fulfilling a set of predefined rules. It is like how you would choose a snack and put money in a vending machine to receive a snack. Smart contracts work in a similar manner. There is no need for a third-party to sign off on the transaction.
There are many similarities and differences between bitcoin and ethereum. These similarities and differences make many consider ethereum as not an altcoin. Let us look at some of the reasons.
1. Ethereum and bitcoin are very similar
Compared to other altcoins, ethereum and bitcoin are the most similar. They are both decentralized and built on a ledger blockchain. When it comes to market capitalization, ethereum comes second to bitcoin. This means it is gaining almost as much popularity as bitcoin. Over the years, ethereum has gained wide recognition as a unique blockchain platform. Many realize its use as an asset on its own merits and demerits, like bitcoin.
2. Ethereum serves as the world’s biggest blockchain platform
Although bitcoin is the leader of cryptos, ethereum is the largest blockchain platform by volume. The platform has over 1,600 decentralized applications. It also has more smart contracts compared to any other digital currency. Over 94% of smart contracts of the top 100 tokens by market cap are built on the ethereum platform. Tron contains more active users than any other digital currency platform. Alternatively, ethereum takes the lead with more decentralized applications and smart contracts on the platform.
3. It consists of a bigger community than Bitcoin
According to Electric Capital, a cryptocurrency asset management firm reported that there are twice as many developers on ethereum as bitcoin. Similarly, Block states that there exists between 250,000 and 350,000 developers working on the platform.
4. Ethereum is the second most popular cryptocurrency
Ethereum is the second most-talked about cryptocurrency after bitcoin. It has a large community, a huge development base, and growing popularity. According to Reddit discussions, many reports show that bitcoin comes in first place. Ethereum comes in second place, and Monero follows in third.
5. Ethereum is the most decentralized blockchain platform
Both bitcoin and ethereum are decentralized platforms working on the ledger platform. However, ethereum is the most decentralized platform of its kind in existence. Ethernodes states that ethereum has a little less than 17,000 nodes on its blockchain platform across six continents. Alternatively, bitcoin has over 66,000 nodes that are mostly in data centers.
There are many altcoins in the crypto world. It is almost impossible to research and understand them all. Ethereum is one of the most popular cryptocurrencies that many view as not an altcoin. Its unique platform and functionality prove that it is a significant competitor of bitcoin. It is also worth noting that it features a fundamentally different purpose.
Ethereum is relatively new and still has a long way to go in terms of exploring what it can do. According to recent data and various arguments, like those mentioned above, it is time for a labeling shakeup. Ether should not be considered an altcoin, but as a uniquely independent cryptocurrency, just like bitcoin.