The second cryptocurrency after bitcoin

Dogecoin

The cryptocurrency project was launched by programmer Billy Marcus as a joke. The developer stated that the creation of Dogecoin took only 3 hours. Its blockchain is based on Bitcoin, but with some differences:

• The coin has unlimited issuance (number of cryptocurrency units).
• The block mining speed is 10 times faster than Bitcoin (1 minute).
• Energy consumption of mining (cryptocurrency mining) – 7% of Bitcoin’s figures.

Dogecoin is a platform for peer-to-peer transactions built on blockchain technology.

Among users, the coin is used as a tip for creators of entertainment and informational content.

Monero

All transactions and wallet addresses in Bitcoin are visible to any blockchain participant. The Monero project appeared in 2014 with the idea of completely anonymous transactions on the network. For this purpose, CryptoNote technology is used, which hides information about users’ wallets. The XMR cryptocurrency is used as a means of payment in more than 100 online services (as of January 2022). The main characteristics of the network are:

• Anonymity (addresses, transactions and the number of coins in transfers are completely hidden from third parties).
• The mining speed of one block is 2 minutes (5 times faster than Bitcoin).
• Unlimited coin issuance.
• Use of Proof-of-Work consensus algorithm for mining blocks and making transactions in them.

Monero project is trying to be banned in some countries (China, India, UK). Due to the high level of anonymity, XMR coins can be used to launder dirty money.

Binance Coin

BNB cryptocurrency is an exchange-traded coin released by Binance in 2017. Binance Coin was originally an ERC-20 standard token based on Ethereum. Back then, it was only used to reduce the commission when trading on the exchange. Everything changed in April 2019 after the creation of its own blockchain network – Binance Chain. Since that time, the coin has been used:

• As a means of payment.
• As collateral when issuing a crypto loan (Binance Loans).
• To reduce the commission on the Binance exchange.
• As payment for tokens at the IEO stage (initial sale), built on the basis of its own protocol BEP-20.
• When launching smart contracts in the Binance Smart Chain network.
• To keep Binance DEX(decentralized exchange) up and running.

Ripple

The project was launched in 2012 on the basis of its own blockchain XRP Ledger. It is engaged in creating a global system of interbank transfers. The main goal is to make them accessible and anonymous, providing high speed transactions. The company competes with conventional banking systems (for example, SWIFT). Features of Ripple:

• High level of network security.
• Easy conversion of cryptocurrency into fiat money.
• Making payments within 3-5 seconds.
• Decentralization (Ripple cannot interfere with the blockchain).
• Throughput – 1500 transactions per second.
• Banks and payment systems use RippleNet technology for settlements, exchanges and transfers.

In 2020, the SEC (Securities and Exchange Commission) sued the company. The Ripple project faces fines, as well as the obligation to report to the regulator. The reason was that the SEC requires that XRP be recognized as securities. The lawsuit is still ongoing (as of early 2022).

Tron

The network was launched in 2017 under the leadership of Justin Sun. The TRX coin initially existed as an Ethereum-based token. However, in 2018, the project got its own blockchain and all units were reissued on it. The network allows for up to 2,000 transactions per second.

The main idea of Tron is to create a platform that will enable entertainment content providers to interact directly with the audience. For example, YouTube has a central controlling body that censors authors and shows advertisements. The Tron platform offers content creators freedom of action. The audience can directly transfer tips to the author.

The platform also allows to launch decentralized applications (dApps) on the Tron blockchain. Their work is supported by the TRX coin. As of January 2022, the number of dApps working in the network is 1366.

Litecoin

Is one of the first cryptocurrency systems. Altcoin appeared in October 2011, its creator is Charlie Lee. He was imbued with Bitcoin technology and as a result of the fork created a network that became faster and cheaper. The main differences from Bitcoin:

• Low fees ($0.04 per transaction in early 2022).
• Throughput at 56 transactions per second (Bitcoin – up to 5).
• Issue size is 4 times larger – 84 million coins.
• Low power consumption of mining.

The task of this cryptocurrency is to enable electronic transfers without the participation of intermediaries (banks and payment systems).

Cardano

The second cryptocurrency – Ethereum – has many competitors that can surpass it due to its technological sophistication. One such project is Cardano, which uses the ADA coin. It was invented by one of the founders of the Etherium network – Charles Hoskinson. The platform allows for smart contracts, NFTs (non-fungible tokens), decentralized finance (DeFi) and dApps.

In 2020, Hydra technology was introduced to the blockchain to increase the speed of transaction confirmation. Its current capacity limit is up to 1 million transactions per second. Thanks to the Ouroboros protocol, the network is able to instantly enter transactions into the blockchain.

Second cryptocurrency after Bitcoin right now

Ethereum takes the lead in capitalization rankings among altcoins. It can rightfully be called the 2nd cryptocurrency after BTC. Etherium has held this position practically since its appearance. ETH can be considered as a good investment for a long term. After the global update of the network, the coin’s rate is expected to grow.

Investing is associated with the risk of losing money. The increase in the value of ETH cannot be guaranteed and confidently predicted. Cryptocurrencies from the first half of the rating can also depreciate.

Can BTC lose its leadership

Analysts do assume such a scenario. The co-founder of BlockTower Capital, Ari Paul, expressed his opinion. He believes that the slow progress of the Bitcoin network will lead the cryptocurrency to lose its primacy. According to him, Bitcoin is obsolete compared to altcoins.

The decentralized ledger technology is constantly evolving. As of January 2022, 3 generations of blockchains are highlighted:

• Blockchain 1.0. Represents peer-to-peer P2P networks for transferring digital currencies. This generation includes Bitcoin, Litecoin and Dash.
• Blockchain 2.0. Marked by the emergence of Ethereum in the cryptocurrency market. The technology at this stage expands the limits of possibilities: smart contracts, dApps and DeFi are added.
• Blockchain 3.0. This generation is designed to solve the problems of scalability, privacy and full decentralization. This includes the Solano, Cardano and Mina projects.

Conclusions

The main competitor of Bitcoin for January 2022 is the Ethereum network. The ETH coin is the second cryptocurrency in the ranking by capitalization. With the update of Ethereum 2.0, it can take the leading position. This is due to the outdated system on which BTC coins operate.

Bitcoin’s main problem is the Proof-of-Work consensus algorithm. As the complexity of the network increases, more computing power is required from the miners. Because of this, Bitcoin has a low transaction processing speed, causing fees to rise at high loads. Also, a system running on this algorithm is susceptible to a 51% attack.

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