Bitcoin has been the king of the cryptocurrency castle for about as long as it has been around. To be sure, Bitcoin came to us before any other crypto and thus had no real competition, but even now it stands well above any other cryptocurrency.
But when will this dynamic change, if ever?
This event certainly won’t come to pass any time soon, seeing how far ahead Bitcoin is at the moment, but a crypto’s volatility should never be underestimated. To get a clearer picture of how things might play out, we need to see how Bitcoin stays number one, which cryptos stand a chance against it, and how they might go about surpassing Bitcoin in worth.
So, what is it about Bitcoin that keeps it leagues above other cryptos value-wise? Well, the most likely answer has to do with how long it has been around.
Bitcoin was created in 2009. It has had plenty of time to develop and grow and smooth out any rough edges along the way. And grow it did: from its early years (it took two years for Bitcoin to be valued at just $1) it rose at lightning speed to a peak value of $19,783.21 at the end of 2017.
The fact that it stuck around for so long has proved to people that Bitcoin is a comparatively safe and reliable currency. When money is concerned, people will naturally gravitate toward the safest option, and so that option will, in turn, attract even more people as it gains more traction.
Think of it like that fast food joint you and all of your friends go to, rather than playing your odds somewhere else, hoping the food there is as good.
This accumulation of advantage holds the key to the mystery of Bitcoin’s prominence. It has simply proven itself time and time again over the years, a chance all the younger altcoins haven’t had the privilege to enjoy. Thus, it has accrued an immense community around it, making an aspiring altcoins’ ascension all the more arduous.
Another advantage Bitcoin has going for it besides its age is its limited supply. Bitcoin has a supply cap of 21 million bitcoins. A supply cap naturally increases the demand of a product, in part due to the scarcity principle.
Granted, altcoins like Zcash and Litecoin also have a supply cap, but, again, Bitcoin has had much more time to reap the benefits.
Now that we explained what makes Bitcoin top dog, we need to figure out which crypto has the potential to beat it.
Which Altcoins Stand a Chance Against Bitcoin?
The most likely candidate for this momentous task probably stands on the list of top ten cryptocurrencies. These altcoins would have to excel at something Bitcoin has left us wanting, or simply do what it does better. Here we will consider some altcoins that have the potential to dethrone Bitcoin.
Created in 2011 by former Google employee Charlie Lee, Litecoin is a Bitcoin fork made as a smaller, more manageable version of Bitcoin (as seen from its name). It differs from Bitcoin in a few minor, yet critical ways and these could make all the difference.
Firstly, it handles its proof of work differently than Bitcoin. Bitcoin’s proof of work relies on computing power to mine it. The process requires a lot of resources and hardware to do well, so basically, no average person can hope to successfully mine Bitcoin.
Furthermore, the energy output for mining is ridiculously high, using up more energy than some countries.
The high price and energy expenditure make Bitcoin less available for everybody. On the other hand, Litecoin uses memory capacity rather than computing power, so it’s more affordable for everyone and democratizes mining, which can be considered an edge over Bitcoin.
Secondly, Litecoin has far greater transaction speed and block creation rate than Bitcoin. An average Litecoin transaction takes around 10 minutes. That’s six times faster than Bitcoin, which typically needs six confirmations to make sure your transfer is complete.
Ripple’s XRP seems to appeal to banking institutions since it has already been tried out by a dozen R3 banks to cut cross-border transfer costs by acting as a bridge currency. Being associated with authorities of such standing definitely builds confidence in the public eye, and that could contribute to its stability a great deal.
These partnerships have given XRP a fine, pronounced increase in value, taking second place on the crypto market capitalization list. This alliance may prove to be a terrific tool to surpass Bitcoin in the long run.
Similar to Litecoin, XRP can deal with transactions quickly. However, XRP leaves most cryptos in the dust – it easily handles 1,500 transactions per second, the average transaction lasting about four seconds.
Ethereum is quite different than Bitcoin. It’s a decentralized platform that facilitates the creation of various applications, and the distribution of its currency called Ether.
An example of such an application is the smart contract, which acts as a contract that automatically sets its parameters and terminates once its conditions have been either fulfilled or violated.
Ethereum’s primary function isn’t necessarily that of a cryptocurrency, but it can also happily play that role. This kind of flexibility might be the key attribute that lands Ethereum on the number one spot in the crypto race.
Bitcoin does little outside its main function as a cryptocurrency, but Ethereum can fill the niches it cannot. As a result, it could enjoy a lot more attention in the future than Bitcoin, allowing it to gradually climb the ladder to the top.
Although Bitcoin is sure to stay king for a long time, that state might not be permanent, given how unstable trends in the cryptocurrency world could get. Over time, a potential successor may arise, and it may be one not mentioned here at all, but for now, it remains safe to say that Bitcoin is safe.
If you happen to be new to Bitcoin, some parts of this article may have been a bit difficult to understand. If you are interested in learning more about Bitcoin and blockchain technology from the ground up, why not check out this terrific infographic by Bitcoinfy.