Bitcoin has transformed the idea of money. Before the existence of Bitcoin, nobody expected that financial power and transaction should be decentralized from the hands of the central banks. As the internet itself gets more integrated into our daily life, the existence of digital money becomes more important than ever as well. Nowadays, it’s not just BTC, but Bitcoin contenders also play a huge role in the financial system.
When Bitcoin was launched for the first time, it allowed internet users to do peer-to-peer transactions; it doesn’t matter where they come from. This idea has made many people think that cross-border transactions using cryptocurrencies will become the next big thing, thanks to the blockchain technology.
Different from bank transfers, you can easily transfer cryptocurrencies from different countries without any outrageous fees, and the recipient can also receive the crypto within just minutes or even seconds. The potential of using cryptocurrencies to replace outdated bank technology is huge.
In the past five years, there have been many new altcoins that want to try to get that market share from cross-border transactions space. Not only that, but these altcoins also promise better technology, wider use cases, and better consensus mechanism than Bitcoin itself. Do you want to learn which altcoins have the most potential to become Bitcoin’s biggest contender? Let’s find out together.
The second most famous cryptocurrency in the world, Ethereum, is definitely one of the biggest Bitcoin contenders. Proposed in late 2013 by Vitalik Buterin and launched in 2015, Ethereum has become the biggest blockchain ecosystem for decentralized applications (dApps). The idea of using crypto only for one or two specific use cases have long gone thanks to the popularity of Ethereum.
Nowadays, many different crypto tokens and blockchain projects for different use cases are being operated on top of Ethereum. For example, most stablecoins (cryptocurrencies with 1-to-1 valuation to fiat currencies) are utilizing Ethereum. Gold-backed and other asset-backed crypto tokens are also usually launched on Ethereum.
The wide possibilities of Ethereum blockchain have made its native cryptocurrency, Ether (ETH), to be in the pole position to challenge Bitcoin’s dominance. To transfer any token that’s being operated on Ethereum, you need to pay the transaction fee with ETH.
And yes, Ethereum’s future looks strong with Proof of Stake consensus mechanism and other solutions being developed to help Ethereum achieve better scalability and speed. Even though nowadays Ethereum can only achieve about 20-25 transactions per second (TPS), it is believed that Ethereum will be able to achieve thousands of transactions per second once all these scalability solutions can be fully implemented on Ethereum mainnet.
With wide use cases, strong community support, and faster transaction speed, Ethereum has all the right ingredients to be the world’s biggest cryptocurrency.
The third biggest cryptocurrency by market cap, XRP, also has strong potential to be one of the Bitcoin contenders. Created specifically for cross-border transactions, XRP has been utilized by the for-profit company Ripple, to try to replace the outdated SWIFT technology in the banking system. Yes, Ripple has been talking with various banks all over the world to trial the technology of XRP for bank-to-bank transfers.
XRP also has a huge advantage over Bitcoin when it comes to speed and transaction fees. You can easily transfer XRP from one wallet to another within just a few seconds, and the transaction fee is also very cheap. With XRP, the transaction fee won’t be affected by the traffic increase in the blockchain. Bitcoin, for comparison, usually has a higher transaction fee when there are more transactions in its blockchain.
At the moment this post was written, the market cap of Bitcoin was still 15x higher than XRP’s. However, these numbers might change in the future if many big banks start utilizing XRP for cross-border transactions. The volume of cross-border transactions with banks is huge, and it has been increasing in recent years. Imagine if XRP can capture all of that. In that scenario, XRP liquidity will also improve, and natural demand will help XRP price to go up.
Created by Block.one, EOS successfully raised $4 billion in a yearlong Initial Coin Offering from 2017 to 2018. EOS is one of the top 10 most popular altcoins, and EOS definitely has a huge potential to become one of the Bitoin contenders for both Ethereum and Bitcoin eventually. Different from Ethereum, EOS utilizes Delegated Proof of Stake (DPoS) for its consensus algorithm, to achieve a better balance between scalability and decentralization.
While many crypto enthusiasts have criticized EOS for this approach (sacrificing a certain degree of decentralization to achieve faster transaction speed), but EOS believes that this is the right way if blockchain wants to be adopted by mainstream financial applications. Some EOS supporters believe that standard Proof of Stake or Proof of Work consensus won’t be enough for public blockchain to scale.
In terms of purposes and use cases, EOS is a bit similar to Ethereum. EOS blockchain is a platform for dApps, and EOS tokens are used to allocate resources to developers as well as to vote on 21 delegates (block producers) that are needed to confirm transactions on the blockchain.
With massive resources worth billions of dollars, strong community support, and lively dApps, EOS is a good candidate to challenge Bitcoin’s hegemony.
4. Binance Coin (BNB)
If there’s any crypto exchange’s native coin with big potential to replace Bitcoin eventually, it would be Binance Coin (BNB). Yes, BNB, the native coin of the most famous cryptocurrency exchange in the world, Binance, certainly has that potential. Last year (2019) Binance launched its own blockchain platform called the Binance Chain. BNB is used to pay all transaction fees on the Binance Chain.
BNB has other important use cases as well. There are two main appeals of BNB. First of all, BNB is used to give discounts for trading fees on Binance.com. Secondly, certain quarterly revenue of Binance exchange is used to buy back BNB on the open market, and the bought back coins are always burned. This idea was created to help BNB price when the exchange itself gets more revenue. And so far, this idea has definitely helped BNB price and market cap.
BNB use cases are always expanding with Binance exchange keeps introducing new features year after year. It’s believed that BNB might be able to eventually replace Bitcoin, although it will be a big challenge for Binance and the team.
Stellar also has a big potential to become one of the Bitcoin contenders. Just like XRP, XLM has very fast transaction speed and a very cheap transaction fee. They are also designed to work very similarly, with users need to use tags before they can deposit their XLM to crypto exchanges.
The reason why XLM is one of the top challengers is because the Stellar foundation’s huge connections with the financial institutions. IBM Blockchain World Wire, for example, was launched by utilizing Stellar technology. And of course, if IBM Blockchain World Wire can get big market share in the banking system’s cross-border transactions, it will help Stellar and XLM as well. All transactions on Stellar will need to utilize XLM.
Not only its partnership with IBM, but Stellar also has huge partnerships with other startups and companies to tokenize real-life assets. Smartlands is a good representation of these partnerships. It tries to bring fully licensed tokenized real estates to the blockchain, and it chose Stellar instead of other public blockchain networks.
Imagine when banks’ cross-border transactions and the majority of real estate market already use Stellar technology, that will boost XLM’s popularity tremendously.
There are other altcoins that can be mentioned in this list, but for now, these five names above are the most likely to become Bitcoin contenders in the long run. Their partnerships, their community supports, their technologies, and their resources are the reasons why we picked them to be on this list.
It is hard to predict what will happen to the crypto space as everything is pretty unpredictable. Bitcoin still has the first-mover advantage, and it needs a lot of time before any altcoin can come close to Bitcoin’s popularity. One thing for sure, though. Cryptocurrencies are here to stay, and they will become even more popular in the future.