Utility is one of the descriptions that we can often hear in relation to cryptocurrencies. When Bitcoin appeared, it solved some of the burning issues that fiat currencies had and offered a valuable and practical alternative. However, Bitcoin itself was far from perfect when it was released back in 2009. It has been gradually improved ever since, but it failed to satisfy the needs of the users completely.
Why not Bitcoin?
Don’t get us wrong – Bitcoin is still the most popular crypto in the market, and no altcoin will be able to change that soon. However, many people are opting for other cryptos because not all of them are used for the same thing.
In essence, Bitcoin is a currency. Its primary purpose is to be used as a regular payment method. When Satoshi Nakamoto made it, this cryptocurrency offered a decentralized solution to the dominant centralized fiat currencies where banks reigned and set the rules. However, it did not explore all the possibilities that blockchain technology can offer. Therefore, many people opt to try other cryptos as they have a wider range of use. Let’s take a look at them.
Ethereum is much younger than BTC. It was released back in 2014 and was made by Vitalik Buterin who foresaw the potential that blockchain technology bears. Ethereum is actually a whole platform which is based around Smart Contracts and DApps. What does that mean?
Dapp stands for a decentralized application. The code of these apps is running on the decentralized network rather than centralized servers. The other thing is Smart Contracts – with them, you can exchange various stuff, including shares, money, possessions, anything of value basically. The contract is programmed so that it executes only when both sides have fulfilled their agreements.
Today, Ethereum hosts hundreds of dapps and contracts – all of that based on technology proposed by this platform and powered by an altcoin that goes by the name Ether. On the other hand, Ethereum also has some issues, such as scalability and occasional hacks, which need to be further improved in the future.
Monero is just like Bitcoin – digital money. However, Bitcoin had problems keeping everything anonymous, which is actually the main focus of Monero. Unlike the biggest cryptocurrency right now which is labeled as pseudo-anonymous, Monero makes both your data and your transactions entirely unavailable for the public. The creators of this altcoin noticed the problems that many cryptocurrencies have nowadays and launched their product back in 2014.
Although it wasn’t immediately anonymous, the team behind Monero managed to upgrade their technology, and now it fully utilizes the idea that was initially planned. If you are a type of person who doesn’t like all eyes on them, Monero might be your favorite cryptocurrency. They managed to achieve their goal with various technologies such as stealth address and ring signature. Now, even law enforcement is unable to penetrate the protection and anonymity levels that Monero has set.
It is difficult to point the finger at what exactly makes Dash different from Bitcoin in essence. This altcoin had even trouble finding an identity of its own. Just like a teenager that goes through the goth phase, Dash was first released as XCoin and shortly after rebranded as Darkcoin.
The story of a goth kid has a somewhat expected plot twist. It turned out to be a quite successful businessman. This was the time when it found its vocation and adopted a new name – Dash, which is just a short way of saying Digital Cash. So what makes it worthy of this list?
First of all, it has a lot of use cases. Some of the features worth mentioning are InstantSend and PrivateSend. Furthermore, it has a solid foundation, and its management team is simply outstanding.
The initial idea of XRP is to be a cryptocurrency that will be closely related to banks. The team behind it successfully realized their concept. Today, Ripple is an excellent payment protocol which banks use to make international transactions in an instant.
The difference between Ripple and other payment protocols is that Ripple doesn’t require a central counterparty. In fact, its designers made it compatible with every bank and banking institutions. The banks use swift infrastructure, and Ripple is made with that in mind.
Let’s take a step back and take a look at the whole picture. Ripple seems to be doing something very usual. However, its technology is pretty much revolutionary. International banking is one of the burning issues nowadays with fiat currencies. If Ripple becomes widespread, it could potentially improve this type of transactions up to a point where someone in Australia would be able to receive funds from someone in the US in a matter of seconds.
The Internet of Things is used to describe all things that can connect to the Internet nowadays, including our phones, refrigerators, watches, etc. IOTA is a “next generation” type of cryptocurrency which has a goal to become the most widespread currency in the domain of the IoT. It offers a slightly different perspective on payments with its free transactions. IOTA is not based on blockchain but rather on something called Tangle technology.
If you want to invest in altcoins, it’s best that you do it with ones that have a practical use, as many professionals think that utility will prevail. On the other hand, all altcoins offer some kind of practical application which differs from Bitcoin in one way or another. We cannot foretell the future, and it is still early to make any predictions regarding potential altcoins that would become the next popular thing. However, the five presented above have a decent shot at it.