6 Most Important Cryptocurrencies Other Than Bitcoin

Everyone has heard of Bitcoin ever since it’s soared to hundreds and thousands of times in value. It’s definitely the most well known cryptocurrency and the poster child of blockchain technology and cryptocurrencies wherever it shows up in the media. But are there any strong contenders and alternatives out there?

There are an impossibly large number of cryptocurrencies out there today – the largest website reporting statistics related to cryptocurrency, Coinmarketcap, currently tracks over 6500 of them – but only a handful of them have soared past the crowd to become the cream of the crop in the crypto world.

Let’s take a look at some of the most well-known, unique or game-changing coins out there on the market!

Ethereum (ETH)

Ethereum is the brainchild of Vitalik Buterin, who launched it as the first and most powerful implementation of Smart Contracts, which are automated contracts executed via the blockchain.

Ethereum’s innovations in the cryptocurrency space are bordering on making Bitcoin look foolish in comparison – they have a working virtual machine (think a working supercomputer-like entity), extensively documented and developed programming language (solidity) that is very user-friendly, and host millions upon millions of smart contracts that are operational today.

Basic smart contracts operate like a vending machine; you put coins into the machine, select your choice of drink, and the machine spits out a can of soda plus whatever change is leftover from the amount you inserted. In the case of smart contracts, the inputs and outputs are simply changed to data and cryptocurrencies; the contracts execute a fixed set of rules that are fully visible and operational on the blockchain, making it able to execute a wide range of use cases.

At the more complicated level, smart contracts can compile into more complicated systems which are similar to the applications on our mobile phones; these are currently better known as “Dapps”, or decentralized applications.

For instance, a company structure could be emulated on the blockchain; instead of having stakeholders and payments defined by bank accounts, human resources and a finance department, pre-coded set of rules could dictate the way a profitable Dapp will move its cryptocurrencies to the stakeholders involved.

Effectively, a completely decentralized, smart-contract based version of Uber could in theory be coded on the blockchain, thanks to the power of Ethereum.

At present, Ethereum is indisputably the biggest contender to Bitcoin due to its widespread use and implementations; it would not be a stretch to assume that there are more lines of code and services built on Ethereum than there are for all other blockchains combined at the moment.

Monero (XMR)

Monero is well-known as the ultimate “privacy coin”, a cryptocurrency focused on financial anonymity. Unlike most cryptocurrencies, Monero is focused on bringing anonymity to its transactions, users and wallets; transfers made using Monero are largely untraceable and untrackable due to its design.

It’s impossible to tell where transactions originate from or are sent to, or even how much is sent. These characteristics make Monero the most suitable option for transfers of value that need secrecy; of course, this also means that Monero is heavily used in criminal activity.

Nonetheless, the potential and interest in Monero is important, as its characteristics and developments are often implemented in partial form in other blockchains as an “optional” feature; the advancements in privacy it has brought about can eventually be used to develop systems that need a degree of privacy which traditional blockchain technology does not have (Typically, the open-nature of blockchain means that all transactions end up being visible across the network)

Chainlink (LINK)

Chainlink is the current favourite poster child of the cryptocurrency community; it is mentioned everywhere across all places where a blockchain community is active, in part due to a fanatic community of supporters known as “Link Marines”. And their devotion to Chainlink is not without cause; it is a coin that has surpassed its peers to achieve 6th in market capitalization, joining giants such as Ethereum and Bitcoin.

The reason behind its massive growth lies in its use case and purpose, which draws a lot of interest from the blockchain community; it is a decentralized network focusing on enabling Oracles.

Oracles are “middlemen” in computer systems that communicate data; in blockchain, one of the largest problems being researched and developed is on how off-chain data (which inherently requires trust and can be tampered with), can be mixed and transmitted on-chain (where data is trustless and un-tamperable) in a secure and safe manner.

For instance, one could create a smart contract on the blockchain to transfer all cryptocurrencies inside a wallet out to 2 other wallets upon a real-time event being triggered.

The blockchain itself is unable to know when this real-time event is triggered, as it is an off-chain occurrence; in order for it to know, an “oracle” must be used to communicate the happening of the real-time event to the blockchain.

Because this data transfer point is a huge vulnerability (for instance, a malicious actor could step in and pretend to be this oracle, triggering the smart contract prematurely or without its intended purpose), a robust and intelligent oracle network is extremely important.

Chainlink’s fame derives from the partnerships lending credence to its progress in solving this issue: it has partnered with huge names such as Google and Intel, which leads many to believe that its implementation of a decentralized oracle is the furthest and most advanced at present.

It is undoubtedly one of the most interesting and important projects in the cryptocurrency space, which is why it has ballooned in value to where it is today.

Stablecoins (Tether, TrueUSD, USD Coin)

The overarching category of stablecoins are critical to the success of the cryptocurrency ecosystem. Because of the inherent volatility with cryptocurrencies, stablecoins are used to bridge the gap between traditional fiat currencies and cryptocurrencies, and are the perfect hybrid that is able to benefit from the positives of decentralization blockchain brings – as well as to be used as assets within a blockchain environment.

It is no wonder that for months, the top Stablecoins such as Tether, USD Coin, TrueUSD and many more have had the largest and consistently high market capitalizations.

The traditional structure for stablecoins is that they are backed by actual fiat currency held in custody; whether or not these are backed in full (there are some concerns), the nature of these currencies allows easy movement and transition from fiat currency into cryptocurrency, acting as one of the primary bridges that fuel the growth of blockchain and cryptocurrency.

Binance Coin (BNB)

Binance Coin is the native ecosystem token offered by Binance, one of the largest names in cryptocurrency today.

Although they are best known as the world’s largest cryptocurrency exchange by volume, their services go beyond just being an exchange; they operate a blockchain of their own (Binance Chain), a decentralized exchange (Binance DEX), a venture arm (Binance Labs), and more.

Initially, the Binance Coin’s (BNB) primary purpose was to be used to raise funds for the launch of Binance; it was sold in an Initial Coin Offering (ICO) taking place from June 26th to July 3rd 2017, and was promised to be used in various ways that have been expanded significantly since its creation.

In its early days, it was used only to pay for trading fees at a discounted rate on Binance Exchange; by having Binance Coin (BNB) in their exchange wallet, traders could select to pay for trading fees in BNB at a discount from the typical fees, encouraging them to hold and keep BNB in their wallets.

Unlike other tokens that often have an increasing supply released to circulation, BNB hosts periodic burning events that actually result in its supply being reduced over time. Due to economics, this means that the value of BNB following traditional supply and demand projections is expected to increase with every BNB burn; the destruction of BNB is also permanent and irreversible.

Binance has since increased the use cases for BNB beyond just for discounts on trading fees; it uses them to determine participation rights in important events such as sales that are being pushed through the Binance Launchpad, a token sale platform; or used in community votes to decide on coins that are to be listed on the Binance exchange.

These use cases often have users scrambling to acquire BNB to participate, and are definitely practical uses for a token of its nature. Of course, the immense growth enjoyed by the Binance exchange since its launch has also contributed greatly to BNB’s value, making it one of the most sought-after and valuable coins today.

Maker Token (MKR) and DAI (DAI)

Maker Tokens are the governance token that controls the issuance and policies of the Maker Protocol, which issues the stablecoin DAI. DAI uses smart contract mechanisms to keep a stable price; the truly decentralized nature of DAI stablecoins makes MKR governance tokens extremely valuable, and it is one of the first and most successful Decentralized applications and DeFi (decentralized finance) projects on the market.

MKR tokens grant voting rights in governance decisions of the DAO (decentralized autonomous organization) that is in charge of running the Maker Protocol. Unlike typical projects that have a salaried development team working on the project who usually have full control over the code and changes, the Maker Protocol makes changes only when proposed and voted in by tokenholders.

Additionally, possession of MKR tokens is required to perform the collateralization operation that mints and issues DAI stablecoins;  the issuance is known as a Collateralized Debt Position (CDP), where value-bearing assets such as Ethereum (ETH) are overcollateralized and “locked” into a smart contract generated by Maker in order to back the value of issued DAI.

Put in simple English, the Maker Protocol is able to keep the value of DAI precisely at its determined value (in this case, $1 USD) by ensuring that the underlying assets backing the token are worth more than $1.

In the event the underlying asset drops in value and puts the issued DAI at risk of not being fully backed, an automated mechanism will liquidate the underlying assets and acquire the necessary amount of USD to ensure that the DAI is still fully backed. At any point in time, the person issuing the DAI can also return DAI back to the contract and re-acquire their collateral, enabling Maker’s use as a powerful hedging tool while at the same time issuing highly-useful, fully decentralized DAI Stablecoin.

Learn more about Cryptocurrencies with Oobit

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