Released as open source software in 2009 by Satoshi Nakamoto, Bitcoin was the first cryptocurrency ever invented. Since then many other cryptocurrencies have been created, these are known as “Altcoins.” “Altcoin” is the combination of two words, “alternative” and “coin,” in essence, this means any cryptocurrency other than Bitcoin. As of January 2018, there are over a thousand altcoins in existence.
Typically, cryptocurrencies aim to solve an underlying problem within technology. Bitcoin itself acts as a worldwide payment system; just one currency required, wherever you are in the world. On top of that, transactions can take place between the users directly, instead of going through an intermediary.
More recently developed cryptocurrencies, although using the same technological foundation as Bitcoin, have been created for entirely different purposes. Siacoin, for example, is a decentralized cloud storage platform that allows users to rent out their unused hard drive space, in return for Siacoin. By taking advantage of blockchain technology, Siacoin can provide lower prices than Amazon S3, Google Cloud, and Microsoft Azure, while at the same time being wholly private and decentralized.
However, some cryptocurrencies don’t serve much of a purpose at all. Dogecoin, for example, was created as a “joke currency,” aimed at poking fun at the cryptocurrency boom. Despite this, Dogecoin is a relatively successful cryptocurrency, currently ranked 36 at the time of writing.
Disadvantages of Bitcoin
- After nine years, quite a few issues with Bitcoin have emerged.
- Long transaction times means it can take a while for a user to receive Bitcoin after being sent.
- The absence of anonymity allows every single transaction to be publicly available.
- Lack of functionality, as some altcoins now allow the creation of smart contracts.
Does this mean Bitcoin’s dominance is coming to an end?
It’s hard to tell, Bitcoin is still the largest cryptocurrency, commanding 33% of the market. But the recent rise of Altcoins is proving a real threat to Bitcoin’s dominance.
At the moment Bitcoin is the cryptocurrency that is making all the headlines. It is also the most accessible, being the most available on exchanges and with merchants. Additionally, it has the most hardware and software support, but this could all change over time, since, compared to other cryptocurrencies, Bitcoin’s technology is becoming old-fashioned.
Currently, Bitcoin’s most significant threat is Ethereum, often dubbed the “Bitcoin killer,” it can, in essence, do what Bitcoin does better and more. It can act as a digital currency and has a much lower block time at around 15 seconds, compared to Bitcoins 10 minutes. As a result, Ethereum is capable of providing much faster transactions than Bitcoin.
That said, only time will tell when Bitcoin’s dominance comes to an end.
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