The Top 10 Altcoins

Okay, so you understand the foundational concepts behind Bitcoin and Ethereum, and now you want to learn about some other projects in the space. You’ve come to the right place. Here we have a general guide on the top 10 altcoins by market capitalization.

1 — Ethereum

Ethereum has a market capitalization of $251,881,688,584. The Ethereum network allows developers to store software in a decentralized manner using smart contracts that become part of the Ethereum blockchain. The Ethereum network currently powers thousands of decentralized applications (dApps). The Ethereum token is called ether (ETH).

2 — Tether

Tether has a market capitalization of $74,129,779,296. Tether is the world’s first stablecoin. A stablecoin is a cryptocurrency that is pegged to a fiat dollar. Each tether is always 100% backed by Tether’s cash reserves. The value of Tether’s reserves is published daily, and the value of the reserves matches or exceeds the value of all tethers in circulation.

3 — USD Coin

USD Coin has a market capitalization of $52,255,520,126. USD Coin is a stablecoin founded by Circle and Coinbase. USD Coin tokenizes US dollars, and puts them on the blockchain. The advantage of a USD Coin over a dollar is that digital currency is easier to transfer, allowing them to be moved anywhere in the world almost instantly. Many traders and investors use USD Coin to hold funds while keeping their funds on a platform and preparing for their next trade or investment. Keeping the funds in USD Coin eliminates the need to pay fiat on and off ramps.

4 — BNB

BNB has a market capitalization of $49,965,886,365. Binance is one of the largest cryptocurrency exchanges out there, competing for users alongside Coinbase, Gemini, and others.

Binance set out to create their own blockchain, aiming to create a blockchain that was efficient and could handle a lot of data. Binance Chain focused only on the Binance exchange. Soon after, they launched the Binance Smart Chain, which allows for the creation of smart contracts. Smart contracts allow people to create their own applications that run on the blockchain, mint new tokens on the blockchain, and mint NFTs, among other things. When writing the code for the Binance Smart Chain, Binance actually just forked Ethereum’s code so it could have many of the same features, but included some changes to make their network faster and cheaper. Forking code from Ethereum, also allows developers who built projects on Ethereum to easily move their projects from Ethereum’s blockchain to the Binance Smart Chain.

The Binance Smart Chain uses a unique consensus model called Delegated Proof of Stake. Their Delegated Proof of Stake model works by allowing the top 21 people staking the most BNB on the network to decide which transactions get approved and which ones get blocked. You don’t necessarily have to be one of the top 21 owners of BNB in order to participate in this system. You can still earn staking rewards by delegating your staked coins to a top validator, and they will share their staking rewards with you. While this system is more centralized than the Proof of Work method of validation, it does allow for cheaper transaction fees and more transactions per second.

The Binance Smart Chain is so efficient that one person can make hundreds of transactions for under a dollar. By comparison, it costs an average of $3 to $50 to make one transaction using Ethereum.

5 — XRP

XRP has a market capitalization of $21,165,204,464. XRP, which is a blockchain built by Ripple Labs, focuses on sending money cheaply and quickly from one country to another country. There is a big problem when you want to send money between countries. For example, it can take 3 to 4 days to transfer the funds, you often have to pay high fees, and in some countries adequate infrastructure does not exist to complete such transactions.

Ripple Labs has a product called Ripplenet, which allows for the cheap and efficient transfer of money between countries. This system is anti money laundering and has fraud detection built into it. The system has some traction in its use by major institutions, including American Express.

Ripple Labs also started a crypto currency, which is called XRP. One thing that makes XRP unique is the speed and efficiency of its blockchain. Transactions on the XRP blockchain are approved in less than 5 seconds and typically cost less than $0.0002. The chain can also handle up to 1500 transactions per second, which is a lot compared to other blockchains.

Another thing that makes XRP unique is that they don’t use Proof of Stake or Proof of Work to validate transactions. They use a method called a Unique Node List instead. This works by Ripple Labs setting up a unique list of people that they trust, and then the majority decides what gets added to the blockchain and what does not. They don’t use work or a staking feature, but instead go by a system where the majority, from their list of trusted sources, rules in the decision making. There are many critics of XRP that claim the Unique Node List method is too centralized.

6 — Cardano

Cardano has a market capitalization of $19,374,333,869. ADA is the official coin of the Cardano blockchain. Vitalik Buterin and other co-founders launched Ethereum in 2015. One of those other co-founders was Charles Hoskinson, who is at the center of building Cardano. Cardano is a Proof of Stake cryptocurrency. Hoskinson saw that cryptocurrencies were going to suffer from three main problems — scalability, interoperability, and sustainability.

Let’s address scalability. Because of Bitcoin’s block size, the network can only process between 5–7 transactions per second. For context, Visa has a network that processes thousands of transactions per second, making it highly scalable. With any cryptocurrency, it is important to ask how the network can truly scale. Cardano aims to be highly scalable by using epochs, where slot leaders are nominated on each block; slots can then be broken down into further subdivisions and new leaders can be added. This system is called Ouroboros by Cardano and is more scalable than other systems.

Interoperability means the ability to work between blockchains. Cardano uses the KMZ sidechains protocol to allow users to perform operations between blockchains.

Sustainability is also a consideration at Cardano. This type of sustainability does not only include environmental stability, but also the ability of Cardano to have a growing and healthy developer community and maintain a system that can be updated and built to last.

7 — Solana

Solana has a market capitalization of $19,236,132,690. Anatoly Yakavenko is the founder of Solana. Prior to founding Solana, he worked at Qualcomm for about a decade. Solana is actually named after a beach that Yakavenko favors. Solana’s block time is 400 milliseconds, which is much faster than Ethereum’s block time of 10 seconds or Bitcoin’s block time of 10 minutes. Solana’s blockchain can also handle around 710,000 transactions per second, which exceeds Visa’s network 23,666 transactions per second. Transaction fees are also around one hundredth of a penny.

Solana’s consensus mechanism uses neither Proof of Work or Proof of Stake. Instead, Solana uses a mechanism called Proof of History. Proof of History is a lot like Proof of Stake, but it incorporates into its process the variable of time. On other blockchains, the blocks communicate back and forth in order to validate what time it is, using a lot of time energy to keep blocks in the correct order by time in which the block was created. On the Solana blockchain, each computer will timestamp their own block and solve a cryptographic proof when adding their timestamp, eliminating the need for other validators to validate the timestamp. Even if blocks are received out of order, the Solana network can then organize the blocks in the correct order according to their timestamps.

Another unique attribute of the Solana network is that there are no specific requirements that are needed in order to stake. For example, in order to stake Ethereum, you must stake 32 Ethereum, which is equivalent to about $50,000 to $100,000.

Given the way that Solana is engineered, they are actually not restricted by software capacities, but hardware capacities. Every time Nvidia doubles the number of SIMD lanes available, the Solana network doubles in computational capacity.

Solana also has vastly different smart contracts than those on Ethereum. Solana uses a low level programming language for its smart contracts called RUST. This means that programs cannot simply be copied and pasted from the Ethereum network onto Solana, and original code must be written for new projects using RUST.

8 — Binance USD

Binance USD has a market capitalization of $18,219,720,065. Binance USD (BUSD) is a stablecoin created by Binance. Paxos is a company that creates stablecoins to be used by companies for business purposes. Binance USD was created through a partnership between Paxos and Binance. Paxos holds all the dollars needed to back Binance USD in FDIC-insured banks.

Stablecoins are useful because it is easier to move cryptocurrencies around than fiat dollars, so stablecoins are used by companies and individuals who don’t want to convert their cryptocurrency into fiat dollars every time they want to liquidate a cryptocurrency position.

9 — Dogecoin

Dogecoin has a market capitalization of $11,954,230,834. Dogecoin is the number one meme coin of the crypto community. Dogecoin was started by Jackson Palmer as a joke while he was working at Adobe. He tweeted an image of an altcoin with a dog on it, which aimed to make fun of how many pointless altcoins existed in the market. The tweet really took off and became more than just a joke, so Palmer collaborated with Billy Marcus from IBM, and they built a real cryptocurrency and called it Dogecoin.

10 — Polkadot

Polkadot has a market capitalization of $10,856,753,076. DOT is the coin used on the Polkadot network. Polkadot makes a radical departure from the other cryptocurrencies on the market by offering the first layer 0 solution. Polkadot is unique because it aims to connect all the competing blockchain networks with one another.

One of the biggest problems seen in the cryptocurrency space is a lack of interoperability. While Bitcoin, Ethereum, Cardano, and other blockchains are great on their own, they need to be able to interact with one another easily. This is where Polkadot’s layer 0 functionality comes in. Polkadot is a Proof of Stake blockchain that uses a relay chain at its center and allows all the different parachains to connect to the center to achieve consensus with one another.

In Summary

The majority of blockchain projects offer similar functionality with slightly different ways of achieving their functionality. Popular algorithms for achieving blockchain consensus include Proof of Work and Proof of Stake. The Binance Smart Chain and Solana blockchains both expand upon Ethereum’s thesis of software being written on the blockchain via smart contracts, and both projects offer cheaper and more efficient transactions than the Ethereum network. Polkadot offers a completely different company model, as the company focuses on interoperability between blockchains and creates a layer 0 protocol.

Whether you’re looking to invest in different projects or are just generally curious about the crypto space, this article gives a summary of some important details on the top 10 altcoins by market capitalization.