Bitcoin isn’t the only crypto game in town.
Bitcoin (BTC) typically gets the lion’s share of cryptocurrency media coverage, and rightfully so. In the years since the first Bitcoin transaction was completed in 2009, however, thousands of other cryptocurrencies have popped up, creating a confusing landscape for investors. Some altcoins have unique technology that improves on or differentiates them from Bitcoin. Others are simply popular digital currency brands and viral social media memes. Investing in altcoins is a risky endeavor, but it can also be very lucrative given the extreme volatility in the crypto market. Here are seven of the best altcoins to buy.
Ethereum is by far the largest and most popular alternative to Bitcoin, but it was built with an entirely different goal in mind. The decentralized network was the first to introduce smart contracts: code that allows blockchain platforms to run decentralized applications, or dApps. There are currently 2,889 Ethereum dApps, according to the website State of the dApps. The network includes dApps for gaming, gambling, socializing and even decentralized finance, or DeFi. Most nonfungible tokens, or NFTs, are also based on the Ethereum network, making Ethereum arguably the most functional and useful blockchain in the world.
Compared to Ethereum, Solana is a relative newcomer to the crypto space. The cryptocurrency has skyrocketed in popularity, however, making Solana the fourth-most-valuable crypto in the world. Solana also supports dApps and NFTs, but it claims to have only 350 or so projects on the network at this point. Solana’s unique combination of proof-of-history, or PoH, and proof-of-stake, or PoS, transaction verification models is much faster than Ethereum’s proof-of-work, or PoW model. Solana also has lower fees than Ethereum, and its unique verification process uses far less energy than PoW models, making it a greener crypto than Bitcoin and Ethereum.
The Polkadot blockchain launched in 2020 and was developed by Ethereum co-founder Gavin Wood. Polkadot operates a main network blockchain where transactions are permanent. Its unique feature is its so-called parachains, which are user-created blockchains that can be customized while still benefiting from the same security measures as the main chain. Users can customize different parachains for different uses without the main chain requiring additional computing resources. Polkadot also allows for trustless communication between different blockchains. In a practical sense, the Polkadot system could allow investors to trade Bitcoin for Ethereum directly without having to rely on an exchange.
Dogecoin was created in 2013 as a parody of Bitcoin. The joke cryptocurrency caught fire in 2020 thanks in large part to its Shiba Inu dog mascot. Dogecoin became a social media meme phenomenon, but the cryptocurrency has also won over some heavy hitters in the business world. Tesla Inc. (ticker: TSLA) CEO Elon Musk is a Dogecoin investor and claims he has been working with developers to improve Dogecoin system efficiency. Billionaire entrepreneur Mark Cuban has also called Dogecoin the “strongest” cryptocurrency as a medium of exchange. The price of Dogecoin is down about 70% from its May peak.
Litecoin was created in 2011 by former Google engineer Charlie Lee, who now works for crypto exchange company Coinbase Global Inc. (COIN). Lee essentially created Litecoin to be to Bitcoin what silver is to gold. Litecoin’s biggest advantage over Bitcoin is its faster block generation time, which allows for shorter transaction confirmation times. AMC Entertainment Holdings Inc. (AMC) recently said it is pushing to accept Litecoin and other cryptos as payment by the end of 2021, potentially expanding Litecoin’s footprint. The price of Litecoin is up more than 450% in the past three years, but the cryptocurrency has lost significant market share to higher-flying competitors such as Bitcoin and Ethereum.
Shiba Inu (SHIB)
Like Dogecoin, Shiba Inu’s success is primarily a testament to its branding, including its name and logo. Shiba Inu was created in August 2020. In July 2021, its developers launched the ShibaSwap decentralized exchange, which provides financial services for its user community. Outside of ShibaSwap, Shiba Inu has limited functionality. The cryptocurrency is accepted as payment at just 371 global merchants, according to Cryptwerk. By comparison, Bitcoin is accepted by more than 7,600 merchants. A Change.org petition calling for the popular trading app Robinhood Markets Inc. (HOOD) to list Shiba Inu has more than 540,000 signatures, but Robinhood has yet to add Shiba Inu trading.
SafeMoon launched in March 2021 and hit the ground running, skyrocketing in price within weeks of its rollout. SafeMoon was designed to encourage long-term investing and discourage selling. Sellers are charged a 10% fee, and a portion of that fee is returned to existing investors. This system allows investors to generate passive income from their holdings. Like Dogecoin, SafeMoon has gotten some high-profile celebrity endorsements, including Barstool Sports founder Dave Portnoy and social media influencer Jake Paul. Investors hope that the upcoming launch of SafeMoon V2 will help the crypto recapture its momentum after a sizable pullback from April highs.
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Update 11/29/21: This story was published at an earlier date and has been updated with new information.