Cryptocurrencies have grown in popularity since the introduction of bitcoin in 2009. As the first mainstream cryptocurrency, bitcoin set the stage for a world of digital currencies. As the landscape has expanded, new coins, often called altcoins, have emerged, each offering unique features and uses. Here, we'll delve into the key differences between bitcoin and other prominent cryptocurrencies.
Bitcoin is the creation of an anonymous person or group known as Satoshi Nakamoto, and remains the most recognised and valuable by market capitalisation. As the pioneer, bitcoin established the basic principles for cryptocurrencies: decentralised control and transactions verified through a distributed ledger known as a blockchain.
While bitcoin was primarily introduced as a digital alternative to traditional currencies, subsequent cryptocurrencies emerged with specialised purposes. For instance, ether (ETH) is a cryptocurrency that powers a network for creating decentralised applications through smart contracts. Ripple (XRP) focuses on real-time cross-border payments, positioning itself as a solution for financial institutions.
While most cryptocurrencies use a blockchain, the technology and consensus mechanisms behind them can vary. Bitcoin uses a Proof-of-Work (PoW) system, where miners solve complex mathematical problems to validate transactions. Concerns over network scalability and the environmental impact of PoW have led to the creation of alternative systems. Ethereum uses a Proof-of-Stake (PoS) system, deemed more energy-efficient with higher throughput at the expense of tending towards centralisation.
Bitcoin has a capped supply of 21 million coins, a feature designed to counter inflation by ensuring scarcity. This is not the case for most other cryptocurrencies. Some, like ethereum, don't have a hard cap, while others have a different fixed limit or flexible issuance policies.
While bitcoin is increasingly accepted as a form of payment across some platforms and vendors, other cryptocurrencies do not have the same level of adoption.
