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The definition of altcoins has evolved since the early days of cryptocurrency, when only a handful of cryptocurrencies existed. At the time, all but Bitcoin (BTC) were considered altcoins.
Today, the world of crypto assets is much wider. There are various coins and tokens with use cases that go far beyond the medium of exchange, meaning they are not necessarily Bitcoin competitors.
Still, for lack of a better designation, the basic definition of altcoin is any cryptocurrency other than Bitcoin.
Excluding stablecoins, let’s take a look at the top 10 altcoins by market cap. We have excluded stablecoins as they are designed to maintain a stable price and are not typically considered speculative investments.
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1. Ethereum (ETH)
Of the $1 trillion representing the market capitalization of over 20,000 crypto assets currently available, over 19% is held in Ethereum (ETH), the largest altcoin on the market.
Unlike Bitcoin, which is characterized as a “decentralized currency,” think of Ethereum as a distributed computing network where users can use the blockchain to run decentralized applications (dApps) and host smart contracts.
Walker Holmes, Vice President of Metaverse Platform MetaTope, said:
Ethereum critics point to high fees for conducting transactions. But with thousands of blockchain-powered apps and other altcoins, Ethereum is here to stay.
2. Binance Coin (BNB)
- Market cap: $46.7 billion
Binance Coin is a utility token that can be used to pay trading fees and trade discounts on the Binance exchange. Outside of the Binance crypto exchange, he can also use BNB for payment processing such as travel arrangements.
Critics say BNB is not as decentralized as other altcoins. Another risk is that a Securities and Exchange Commission (SEC) investigation has been reported into whether Binance should have registered BNB as a security in its initial coin offer.
3. XRP (XRP)
XRP can be used to facilitate the exchange of various currency types with Ripple Labs, a digital technology and payment processing company. The altcoin has very low transaction fees, but critics say it faces legal issues.
Ripple and two of its executives are involved in an SEC lawsuit alleging that XRP should have been registered as a security, with the company saying XRP is instead a currency.
4. Dogecoin (DOGE)
- Market cap: $13.5 billion
Dogecoin is the original meme coin known to have started as a joke in 2013. Nevertheless, it quickly evolved into a prominent cryptocurrency thanks to a dedicated community and creative memes.
Richard Gardner, CEO of financial software provider Modulus Global, points out that while DOGE has some big backers, it is still riskier than Bitcoin.
“Altcoins like DOGE have yet to prove a real-world use case, so they can swing to extreme lows and highs depending on market volatility,” he said. Garry Krugljakow, founder of the 0VIX protocol, a decentralized app.
5. Cardano (ADA)
- Market cap: $10.8 billion
Cardano was an early adopter of the Proof of Stake consensus mechanism. This reduces transaction times by removing the competitive and energy-intensive problem-solving aspects of platforms like Bitcoin.
“Cardano is an industry thought leader, paving the way for a proof-of-stake consensus mechanism,” says Holmes. “ADA is a blockchain solution that promises lower fees with a higher level of security than many of its counterparts.”
But Daniel Logvin, CEO of blockchain network provider and consultancy LedgerByte, says the altcoin has made too many promises and has yet to deliver.
6. Polygon (MATIC)
Polygon is an Ethereum-based scaling platform that enables developers to build dApps with low transaction fees.
“This will allow people to process transactions on the Ethereum network,” said Logvin. “This solution increases efficiency and saves a lot of money on gas (transaction fees).” Transaction fees, gas fees, are generally cheaper on Polygon than on Ethereum.
7. Polka Dot (DOT)
The altcoin powers the Polkadot ecosystem where developers can build purpose-built blockchains as spokes that connect to the main Polkadot blockchain hub, said a blockchain network built on top of Polkadot. said Max Sarke, co-founder of peaq. DOT is his Polkadot native token.
“There is a sustained demand for DOT from projects that aim to build on (some) Polkadot,” he says.
The altcoin has more shared security and is a leader in developer activity and many projects, said James Wo, CEO of blockchain and cryptocurrency investment firm Digital Finance Group. I’m here. But he says the project is progressing slowly and lacks star applications that can help strengthen the ecosystem.
8. Shiba Inu (SHIB)
- Market capitalization: $5.06 billion
Similar to DOGE, this is another meme coin. A joke based on a joke called the “Dogecoin Killer”. Although based on the Ethereum blockchain, there are SHIB-based non-fungible tokens (NFTs), but Shibainu is one of the altcoins that he does not invest in as a use case.
It’s not that there aren’t any investment opportunities. Speculators can make a lot of money, but lose it all in this highly volatile crypto asset.
9. Tron (TRX)
- Market cap: $5.01 billion
Tron is a blockchain that developers can use to share media content and create decentralized applications. TRX also has money deposited in sound Total Value Locks (TVL) or Decentralized Finance. TVL is the total amount of crypto assets deposited in decentralized finance (DeFi) protocols such as staking, lending and liquidity pools.
A high TVL indicates the popularity of the protocol and the adoption rate of a particular cryptocurrency. His TVL on TRX is currently at his $5.2 billion, according to DeFi Llama.
10. Solana (SUN)
Developed to power decentralized finance, apps and smart contracts, Solana runs on a unique hybrid proof-of-stake and proof-of-history mechanism to process transactions quickly and securely.
Solana is one of the fastest blockchains. Still, it also faces criticism for having far fewer validating nodes and being too centralized compared to Ethereum, said Whitney Setiawan, a research analyst at digital asset exchange BiTrue.
According to Holmes, Solana is a highly scalable blockchain solution with very low fees, but it does experience outages and downtime.
*Market cap and price are sourced from coinmarketcap.com as of December 1, 2022.
