Tech
Bitcoin Vs Other Cryptos: What’s The Difference?
Cryptocurrencies are no longer a foreign concept, as they have existed for over a decade. However, here’s something that might come as a shock to you. Did you know there are over 20,000 cryptocurrencies in existence? Even though some are inactive or were discontinued, there are still many other tokens besides Bitcoin.
Bitcoin remains the king of the hill, and here’s how the token differs from other cryptocurrencies.
Bitcoin – The First-Ever Digital Currency
To date, some people still refer to Bitcoin as a cryptocurrency and vice versa. This is because the whole crypto conversation started with Bitcoin. In 2009, Satoshi Nakamoto, whose identity remains unknown, authored Bitcoin’s white paper and helped create its blockchain. Using modern approaches, Bitcoin emerged as a challenge to traditional fiat currency, which is why there was so much buzz about it.
Bitcoin offered a different approach to money as we knew it, providing a decentralized structure where money wasn’t regulated by central authorities and banks. It was a thought-provoking creation and there was nothing like this before. Two years later, the second cryptocurrency, Litecoin, was created in 2011. After Litecoin, Ripple followed next and many others came along leading to thousands of new crypto tokens known as altcoins.
Market Dominance
Ever since Bitcoin was launched, it has always retained the number 1 spot in the crypto market capitalization chart. To put it into perspective, the total global crypto market cap is slightly over $2 trillion and Bitcoin’s market cap is just above $1 trillion, making it close to 50%. As of August 2024, the second most popular crypto is Ethereum, with a total market value of over $300 billion.
Bitcoin’s market dominance can be attributed to several things and one of them is its popularity. As the first-ever digital currency, Bitcoin became well-known and has had various use cases such as a store of value, peer-to-peer payments, investment, and DeFi. Slowly, Bitcoin expanded its horizon from just the tech world to banking, finance, and gaming.
The latter, for instance, has led to crypto gaming sites where players can enjoy their favorite casino games using Bitcoin. From slots and roulette to baccarat and poker, you can play a wide range of games with BTC. Additionally, there are sweepstakes casinos—legal in the US—that offer an exciting way to use Bitcoin. In these casinos, you can deposit your BTC, participate in sweepstakes games,, and potentially win prizes.
Functionality
Here’s an interesting fact to know about Bitcoin. The currency was created in 2009, just a year after the global financial crisis of 2008. It might be a coincidence but chances are Bitcoin was created as a response to the crisis and as an alternative solution. Thus, Bitcoin is a virtual currency that operates on a decentralized network whose transactions are recorded on a public ledger called a blockchain.
As other cryptocurrencies came up, they identified a unique aspect of Bitcoin and developed further on that. That’s why you have smart contract blockchains like Ethereum and Cardano, which help developers build decentralized apps (dApps), or privacy coins like Monero and Dash, which prioritize privacy and anonymity. There are also stablecoins such as Tether and USD Coin, that are pegged to a stable currency like the US dollar.
Token Circulation
Unlike the US dollar or several other fiat currencies, which can be printed at will, Bitcoin and some other cryptocurrencies have a limited supply. This helps curb inflation and adjusts the value of a single coin to its demand. In the case of Bitcoin, there are 21 million coins in circulation, and 1 BTC is worth about $59,000 as of mid-August 2024.
Ethereum has approximately 120.27 million coins in circulation and USDT has a total supply of approximately 115.64 billion coins. So as you can see, this is one element that makes every token unique and helps decide its value.
Mining Process
There are several ways in which one can get Bitcoins. Besides trading for them with fiat currency or other tokens, you can choose to mine the coins.
The Bitcoin mining process uses a proof-of-work algorithm to validate all transactions on the blockchain. Ethereum and Binance Coin, on the other hand, use a proof-of-stake algorithm which requires less energy and is more environmentally friendly.
Which Is the Finest Crypto?
The question doesn’t have an outright answer because different cryptos perform various functions. If you are looking for a crypto to hold on to as a store of value, Bitcoin might have higher returns. If you are searching for a token that will focus on privacy, then Dash would be ideal. The best answer to that question is to reverse it and ask yourself what you are looking for in a crypto token.
Once you have that answer, you can easily know which crypto is the best for you. However, it’s important to know that the cryptocurrency market is highly volatile and is considered a high-risk industry. So be cautious even as you delve deeper into the exciting crypto world!