4 bitcoin alternatives to try out in 2023
Upon entering 2023, the crypto market tendencies show a slightly favorable upward situation. The bitcoin price has had some interesting spikes recently, contributing to its usage. Bitcoin and Ethereum are still on top of the market, providing stability, security and investing opportunities. However, as Bitcoin is close to its end of issuing coins and Ethereum focuses on blockchain, many other cryptocurrencies are released every now and then.
According to Statista, there are around 9,000 cryptocurrencies as of 2023. Still, not all of them provide market profitability, as only a few make up almost 90% of the total crypto market. With that being said, many of these coins come with similar features to Bitcoin, which we’ll discuss in the following paragraphs.
Ripple (XRP) was released in 2012, a few years after bitcoin’s issuance. As there’s a limited number of coins, it can’t be mined, but Ripple works like a blockchain by using multiple nodes to process transactions. It’s one of the most efficient and speedy cryptocurrencies out there, and more than 100 banks have already signed up to use XRP as an infrastructure system.
The reasons why Ripple would be a great alternative to Bitcoin include the following:
- Different validation models. Ripple validates transactions with nodes that verify a transaction’s authenticity through polls. This leads to almost instant confirmations; the network can process 1.500 transactions per second;
- Different fees. XRP transactions are charged, but they’re less pricey than bitcoin due to fast confirmations;
- Different market cap. Compared with Bitcoin’s limited supply, 21 million coins and one billion XRP have been launched and released gradually since;
- Different circulation mechanisms. XRP is released through smart contracts in a number of a maximum of 1 billion per month; the unused ones return to an escrow account;
Finally, Ripple is also a sustainable alternative compared to Bitcoin, which consumes a considerable amount of energy since mining is still challenging. The XRP network is 61,000x more energy-efficient than PoW blockchains.
Stellar (XLM) was launched in 2014 and worked by updating its distributed ledgers every two to five seconds, and its consensus mechanism enables faster transactions. The Federated Byzantine Agreement (FBA) uses a part of the network to approve and validate transactions, which is what makes this cryptocurrency special. Transactions on Stellar are processed in a number of around 1.000 per second.
What makes Stellar a Bitcoin competitor are some of these features:
- Fast and inexpensive transactions. Stellar’s protocol allows users to exchange different types of tokens fast, which helps them to get as many transactions approved as possible;
- Reasonable fees. Since transactions are fast due to the networks’ API and SDK, their prices are pretty good for both investors and businesses;
- Scalability. As transactions and conversion can take up to a few seconds, the network is highly scalable for isolation and high availability;
Stellar has had an excellent reputation since its release due to its exceptional business delivery services. Given that it’s easy to use, customers don’t have to understand and research the process of signing a transaction. Stellar’s flexibility is a perfect tool for any company and clients who want to benefit from accessible services.
Ethereum (ETH) is one of the most famous Bitcoin competitors on the market. It was founded in 2013, and the creator intended to design something that provides the same transactional services as Bitcoin but also offers something more than that. Therefore, users can develop a smart contract on the blockchain, create DAOs and DApps and mint NFTs. What’s interesting about Ethereum’s network is the unlimited coin supply.
Ethereum has the following benefits:
- Decentralization. Ethereum’s decentralized design is efficiently distributed among the blockchain’s members, removing the need for a central authority to rule over the network.
- Rapid deployment. Ethereum is a great choice for businesses because they can deploy their own organizations using SaaS solutions;
- Private transactions. On Ethereum, private data is encrypted and only shared between the collaborators of an organization;
- Tokenization. Anything that has been registered digitally can be tokenized on the network so that companies can fractionalize assets;
Although Ethereum is a good investment for anyone who wants to diversify their portfolio and own secure assets, it’s also one of the best blockchains for developers who want to test their abilities and create something new for the market. At the same time, NFTs are minted on the network, contributing to artists’ incentivization.
Polkadot (DOT) is known for providing one of the best open-source blockchain technologies. Its essential feature is inoperability, ensuring a secure data transfer across different blockchains. Polkadot uses parachains so that blockchains can communicate and interact easily through its consensus mechanism. When it comes to notable contrasts between Polkadot and Bitcoin, we can identify the following:
- Lower fees. Polkadot uses a weighted fee system which, compared to Bitcoin, allows for lower transaction costs;
- Verification. While Bitcoin still uses the PoW consensus mechanism, Polkadot has the PoS system where validators are selected by their quantity of DOT holdings;
- High energy efficiency. Compared to Bitcoin, which is one of the most energy-consuming cryptocurrencies, Polkadot has one of the lowest carbon footprints among PoS mechanisms;
- Blockchain innovation. Using the blockchain’s Substrate framework, businesses can connect their chains to Polkadot and benefit from interoperability and security;
Other use cases include DOT holding for governance matters or facilitating Polkadot’s consensus mechanism by delegating tokens to the network. Locking up DOT for Bonding is also made for adding new parachains to the network, which is the blockchain’s unique feature.
Polkadot is one of the most scalable networks since it enables a standard set of validators to validate other blockchains by spreading transactions. Scalability is also how Polkadot achieves these performances through different shards.
Bitcoin is the first and one of the best cryptocurrencies out there. It’s safe for investors and satisfactory, but some issues, such as high transaction fees and low sustainability, make investors reorient to other alternatives. For 2023, other cryptocurrency substitutes include Ripple, Ethereum and Polkadot, which we’re interested in their performance.