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Is Bitcoin better than other cryptocurrencies?

Deployed in 2009, Bitcoin made a significant change in the financial world. The first decentralized digital currency offered customers what fiat currency lacked: proprietorship, security and reliability. Following Bitcoin’s appearance on the market, many other coins copied the concept and added special features that would differentiate them. For example, Ethereum has the same transactional idea but leverages many other functionalities, such as smart contracts, DApps and NFTs.

Compared to the xwp price, Bitcoin has gained popularity for its reliability. People worldwide without access to banking solutions could now have their own accounts and control their finances without Bitcoin. At the same time, companies could offer a more varied range of payment possibilities for all clients.

However, Bitcoin has its drawbacks. For example, mining is one of the most unsustainable practices as it consumes a lot of energy and pollutes the environment. This also decreases the network’s productivity, which adds to the limited coin cap Bitcoin will soon reach.

Despite these situations, is Bitcoin better or not compared to other cryptocurrencies? Let’s find out.

What makes Bitcoin different?

Bitcoin’s concept starts by relying on peer-to-peer software and cryptography. It leverages a public ledger where bitcoin transactions are recorded while copies are held on servers. Anyone can set up such a server, known as a node. It may seem complicated, but the process is not that difficult to comprehend once you’re setting up your own station and starting mining.

Besides this process that many other cryptocurrencies have used, Bitcoin has some unique features. For example, its community has spread globally, increasing the number of nodes that can improve Bitcoin’s network. When measured by hash rate, capitalization and volume, Bitcoin outshines any other coin simply through recognizability and network effects.

A further aspect that makes Bitcoin stand out is its antifragility. Through its developing years, Bitcoin has experienced many ups and downs, which led to improvements rather than failure. Syncing became faster, transaction throughput increased, and scaling and privacy were built to protect people’s assets.

Moreover, Bitcoin went through social backlash multiple times as governments were disputing the direction of the protocol and its worldwide acceptance. While it was banned in a few locations (such as China), people continued using it and seeking financial freedom from institutions. Therefore, Bitcoin gained more than a decade of experience that no other coin has reached.

What are Bitcoin’s limitations?

Besides plentiful benefits, Bitcoin’s drawbacks might want investors to seek other alternatives. For example, the network’s speed has not improved much, and other less popular coins like Ripple, EOS, Cardano and Solana have faster and cheaper transactions than Bitcoin. Even VISA can handle more transactions than Bitcoin.

The next and most obvious issue is volatility. Although it has been present on the market for longer, Bitcoin still has the same volatility level that makes it challenging for investors to maintain a stable portfolio. Of course, holding Bitcoin and other more significant coins is essential because they leverage benefits. Still, in the case of a bearish market, the benefits of owning it might be more or less profitable.

Thirdly, Bitcoin fees are increasing, pushing customers back from getting more bitcoins. For smaller transactions, the prices implied are not cost-effective; in this case, fewer investors and customers are doing bitcoin transactions.

Finally, the potential for theft has increased in the past years since the network got bigger. Although it’s virtually impossible to steal digital currency, some people found ways to exploit the lack of security and regulation to create crypto attacks. Some clients own vulnerable wallets and are not aware of the consequences of not having digital protection when dealing with cryptocurrency.

Bitcoin vs. Altcoins: which is a better investment?

Altcoins have been created especially to act as a Bitcoin alternative. Ethereum is the most known example, as it followed Bitcoin’s consensus and technology but introduced other essential features. Ripple, Litecoin and Solana can be included in the same category as they primarily offer peer-to-peer transactions. Still, their platforms and blockchains have different approaches to customer service.

Altcoins are somehow linked to Bitcoin, so when it falls, or prices increase, they tend to follow the same pattern. Most of them are stable on the market simply because they provide other utility sources that differ from what Bitcoin has to offer. On the other hand, there will constantly be growing demand for bitcoin, which adds to its credibility.

But what would make people choose altcoins instead of Bitcoin related to their price fluctuations? Experts say that money can flow from bitcoin to altcoins when its price increases and vice versa. Plus, altcoins have the ability to ensure high returns on the initial investment, but this depends on certain factors. If altcoin projects are maintained, chances are that your portfolio will significantly benefit from this aspect, but it would be best to avoid altcoin projects that are not operated.

Bitcoin vs. Ethereum, the second-biggest altcoin

There’s a continuous battle between Bitcoin and Ethereum, which is fundamentally an altcoin. While some say Bitcoin is safer, others prefer Ethereum because its community-driven operations boost the coin’s price. Ethereum’s blockchain is the perfect place for developers and investors as well to leverage their skills, and yield high returns, as there are multiple ways to do it.

There are a few key differences between these two cryptocurrencies. While Ethereum’s block time is significantly less than Bitcoins’, they have distinct consensus mechanisms. Ethereum switched from PoW to PoS to make the network faster and more sustainable, while Bitcoin remained at PoW, contributing to the coin’s fall. Regarding the future, Bitcoin is reaching its maximum coin supply, while Ethereum has an unlimited one.

Bottom line

In the end, Bitcoin is an excellent digital currency, but there might be better solutions depending on what you want to use cryptocurrencies for. Other coins, such as Ethereum, may offer just what you were looking for. So no, Bitcoin is not necessarily better than the rest of the coins on the market, but it undoubtedly revolutionized the financial sector.