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Bitcoin has not only been a trendsetter, ushering in a wave of

cryptocurrencies built on a decentralized peer-to-peer network but has also
become the de facto standard for cryptocurrencies, inspiring an ever-
growing legion of followers and spinoffs.

Because it isn't the only cryptocurrency available, it is essential to look into

others and find out which ones besides Bitcoin are doing well. Here are
some cryptocurrencies that have held on throughout steep price climbs and
nosedives.

KEY TERMS

• Bitcoin continues to lead the pack of cryptocurrencies in terms of

market capitalization, user base, and popularity.
• Other virtual currencies such as Ethereum are helping to create
decentralized financial (DeFi) systems.
• Some altcoins have been endorsed as having newer features than
Bitcoin, such as the ability to handle more transactions per second or
use different consensus algorithms such as proof of stake.

What Are Cryptocurrencies?

Before taking a closer look at some of these alternatives to Bitcoin (BTC),
let’s step back and briefly examine what we mean by terms
like cryptocurrency and altcoin. A cryptocurrency, broadly defined, is virtual
or digital money that takes the form of tokens or “coins.” Though some
cryptocurrencies have ventured into the physical world with credit cards or
other projects, the large majority remain entirely intangible.

The “crypto” in cryptocurrencies refers to complicated cryptography that

allows for creating and processing digital currencies and their transactions
across decentralized systems. Alongside this important “crypto” feature is a
common commitment to decentralization; cryptocurrencies are typically
developed as code by teams who build in mechanisms for issuance (often,
although not always, through a process called mining) and other controls.

Cryptocurrencies are almost always designed to be free from government

manipulation and control—although, as they have grown more popular, this
foundational aspect of the industry has come under fire. The
cryptocurrencies modelled after Bitcoin are collectively called altcoins, and
in some cases, shitcoins, and have often tried to present themselves as
modified or improved versions of Bitcoin. Though some of these currencies
may have some impressive features that Bitcoin does not, matching the
level of security that Bitcoin’s networks achieve largely has yet to be seen
by an altcoin.

Types of Altcoins
Cryptocurrencies

Cryptocurrencies are intended for payments, transmitting value (akin to

digital money) across a decentralized network of users. Many altcoins (i.e.,
those that are not Bitcoin or sometimes Ethereum) are classified in this way
and may sometimes be called value tokens.

Tokens

There are also blockchain-based tokens that are meant to serve a different
purpose from that of money. One example could be a token issued as part
of an initial coin offering (ICO) that represents a stake in
a blockchain or decentralized finance (DeFi) project. If the tokens are linked
to the value of the company or project, they can be called security tokens
(as in securities like stocks, not safety).

Other tokens have a particular use case or function. Examples include Storj
tokens, which allow people to share files across a decentralized network, or
Namecoin, which provides decentralized Domain Name System (DNS)
service for Internet addresses. These are known as utility tokens.

Today, while many crypto users understand and appreciate these

differences, traders and lay investors may not notice the difference because
all categories of tokens tend to trade on crypto exchanges in the same way.

1. Ethereum (ETH)
The first Bitcoin alternative on our list, Ethereum (ETH), is a decentralized
software platform that enables smart contracts and decentralized
applications (dApps) to be built and run without any downtime, fraud,
control, or interference from a third party. The goal behind Ethereum is to
create a decentralized suite of financial products that anyone in the world
can freely access, regardless of nationality, ethnicity, or faith. This aspect
makes the implications for those in some countries more compelling
because those without state infrastructure and state identifications can get
access to bank accounts, loans, insurance, or a variety of other financial
products.

The applications on Ethereum are run on ether, its platform-specific

cryptographic token. Ether (ETH) is like a vehicle for moving around on the
Ethereum platform and is sought mostly by developers looking to develop
and run applications inside Ethereum, or now, by investors looking to make
purchases of other digital currencies using ether.

Ether, launched in 2015, is currently the second-largest digital currency by

market capitalization after Bitcoin, although it lags behind the dominant
cryptocurrency by a significant margin. Trading at around $1,200 per ETH
as of July 8, 2022, ether’s market cap of $147.5 billion is less than half of
Bitcoin's.

2. Tether (USDT)
Tether (USDT) was one of the first and most popular of a group of so-
called stablecoins—cryptocurrencies that aim to peg their market value to a
currency or other external reference point to reduce volatility. Because most
digital currencies, even major ones like Bitcoin, have experienced frequent
periods of dramatic volatility, Tether and other stablecoins attempt to
smooth out price fluctuations to attract users who may otherwise be
cautious. Tether’s price is tied directly to the price of the U.S. dollar. The
system allows users to more easily make transfers from other
cryptocurrencies back to U.S. dollars in a more timely manner than actually
converting to normal currency.

Launched in 2014, Tether describes itself as “a blockchain-enabled

platform...to make it easier to use fiat currency digitally.” Effectively, this
cryptocurrency allows individuals to utilize a blockchain network and related
technologies to transact in traditional currencies while minimizing the
volatility and complexity often associated with digital currencies.

As of July 8, 2022, Tether is the third-largest cryptocurrency by market

capitalization, with a market cap of $70 billion and a per token value of
$0.9994.

3. USD Coin (USDC)

Another stablecoin, USD Coin also pegs its price to the U.S. dollar using
fiat-collateralized reserves, which means it holds an amount of fiat currency
equal to the amount of USD Coin in circulation. USD Coin was launched in
2018 by the Centre Consortium, which consists of Circle and Coinbase.
Because Circle is based in the U.S., it is subject to regulation—this makes
USD Coin a regulated stablecoin.

As of July 8, 2022, USD Coin has a market cap of $55.5 billion and a price
per coin of $1. It ranks fourth in market cap and trading volume.
4. Binance Coin (BNB)
Binance Coin (BNB) is a utility cryptocurrency that operates as a payment
method for the fees associated with trading on the Binance Exchange. It is
the third-largest cryptocurrency by market capitalization. Those who use the
token as a means of payment for the exchange can trade at a discount.

Binance Coin’s blockchain is also the platform on which Binance’s

decentralized exchange operates. The Binance Exchange was founded by
Changpeng Zhao and is one of the most widely used exchanges in the world
based on trading volumes.

Binance Coin was initially an ERC-20 token that operated on the Ethereum
blockchain. It eventually had its own mainnet launch. The network uses a
PoS consensus model. As of July 8, 2022, Binance Coin has a $39 billion
market capitalization, with one BNB valued at around $241.83.

5. Binance USD (BUSD)

Binance USD was created by the cryptocurrency exchange Binance as a
stablecoin pegged to the U.S. dollar. The stablecoin was approved by the
New York State Department of Financial Services; thus, it is also regulated.

On July 8, 2022, BUSD had a market cap of $17.5 billion and was trading at
$0.9994 per coin.

6. XRP
XRP is the native token for the XRP Ledger, created as a payment system
by Ripple in 2012. The XRP Ledger uses a consensus mechanism called
the XRP Ledger Consensus Protocol, which doesn't use proof-of-work or
proof-of-stake for consensus and validation. Instead, client applications sign
and send transactions to the ledger servers. The servers then compare the
transactions and conclude that the transactions are candidates for entry into
the ledger.

The servers then send the transaction candidates to validators, who work to
agree that the servers got the transactions right and record the ledger
version.

On July 8, 2022, XRP had a market cap of $16.5 billion and traded around
$0.34.

7. Cardano (ADA)
Cardano (ADA) is an “Ouroboros proof-of-stake” cryptocurrency created
with a research-based approach by engineers, mathematicians, and
cryptography experts. The project was co-founded by Charles Hoskinson,
one of the five initial founding members of Ethereum. After disagreeing with
the direction that Ethereum was taking, he left and later helped to create
Cardano.

The team behind Cardano created its blockchain through extensive

experimentation and peer-reviewed research. The researchers behind the
project have written more than 120 papers on blockchain technology across
various topics. This research is the backbone of Cardano.

Due to this rigorous process, Cardano stands out among its PoS peers and
other prominent cryptocurrencies. Cardano has also been dubbed an
“Ethereum killer” because its blockchain is said to be capable of more. That
said, Cardano is still in its early stages. Though it has beaten Ethereum to
the PoS consensus model, it still has a long way to go regarding DeFi
applications.

Cardano aims to be the world’s financial operating system by establishing

DeFi products similar to Ethereum's and providing solutions for chain
interoperability, voter fraud, and legal contract tracing, among other things.
As of July 8, 2022, Cardano has the eighth-largest market capitalization at
$15.7 billion, and one ADA trades for around $0.47.

8. Solana (SOL)
Founded in 2017, Solana is a blockchain platform designed to
support decentralized applications (dApps). Also referred to as an
'Ethereum killer,' Solana performs many more transactions per second
than Ethereum. Additionally, it charges lower transaction fees than
Ethereum.

Solana and Ethereum can utilize smart contracts, which are essential for
running cutting-edge applications, including decentralized finance
(DeFi) and non-fungible tokens (NFTs). However, the two have some
fundamental differences.

Ethereum uses a proof of work (PoW) blockchain, meaning miners compete

to solve complex puzzles to validate transactions, making this technology
more energy-intensive and thus more damaging to the environment. In
contrast, Solana uses proof of stake (PoS), which is said to be less harmful
than PoW.
The cryptocurrency running on the Solana blockchain is called Solana
(SOL). Since its inception, its price has risen tremendously. Solana has
a market capitalization of $12.8 billion, and is valued at around $38, making
it the ninth-largest cryptocurrency by market cap.

9. Dogecoin (DOGE)
Dogecoin (DOGE), seen by some as the original “memecoin,” caused a stir
in 2021 as its price skyrocketed. The coin, which uses an image of the Shiba
Inu as its avatar, is accepted as a form of payment by some major
companies.

Dogecoin was created by two software engineers, Billy Markus and Jackson
Palmer, in 2013. Markus and Palmer reportedly created the coin as a joke,
commenting on the wild speculation of the cryptocurrency market.

As of July 8, 2022, Dogecoin’s market capitalization is $19.2 billion, and one

DOGE is valued at around $0.07 making it the 10th-largest cryptocurrency.

SHIB
A memecoin inspired by a memecoin, Shiba Inu (SHIB), rose to prominence
in the fall of 2021, briefly surpassing Dogecoin's market capitalization.

10. Polkadot
Polkadot (DOT) is a unique PoS cryptocurrency aimed at delivering
interoperability among other blockchains. Its protocol is designed to connect
permissioned and permissionless blockchains and oracles to allow systems
to work together under one roof. Polkadot’s core component is its relay
chain, which enables the interoperability of varying networks. It also
provides for parachains—parallel blockchains with their own native tokens
for specific-use cases.

Where Polkadot differs from Ethereum is that rather than creating just dApps
on Polkadot, developers can create their own blockchain while also using
the security that Polkadot’s chain already has. With Ethereum, developers
can create new blockchains but need to create their own security measures,
which can leave new and smaller projects open to attack because the larger
a blockchain, the more security it has. This concept in Polkadot is known as
shared security.

Polkadot was created by Gavin Wood, another member of the core founders
of the Ethereum project who had differing opinions about the project’s future.
As of July 8, 2022, Polkadot has a market capitalization of roughly $6.9
billion, and one DOT trades for $7.12.
Decentralized Systems
What is decentralization?

In blockchain, decentralization refers to the transfer of control and decision-

making from a centralized entity (individual, organization, or group thereof)
to a distributed network. Decentralized networks strive to reduce the level of
trust that participants must place in one another, and deter their ability to
exert authority or control over one another in ways that degrade the
functionality of the network.

Why decentralization matters

Decentralization is not a new concept. When building a technology solution,

three primary network architectures are typically considered: centralized,
distributed, and decentralized. While blockchain technologies often make
use of decentralized networks, a blockchain application itself cannot be
categorized simply as being decentralized or not. Rather, decentralization
is a sliding scale and should be applied to all aspects of a blockchain
application. By decentralizing the management of and access to resources
in an application, greater and fairer service can be achieved.
Decentralization typically has some tradeoffs such as lower transaction
throughput, but ideally, the tradeoffs are worth the improved stability and
service levels they produce.

Benefits of decentralization:

Provides a trustless environment

In a decentralized blockchain network, no one has to know or trust anyone

else. Each member in the network has a copy of the exact same data in the
form of a distributed ledger. If a member’s ledger is altered or corrupted in
any way, it will be rejected by the majority of the members in the network.

Improves data reconciliation

Companies often exchange data with their partners. This data, in turn, is
typically transformed and stored in each party’s data silos, only to resurface
when it needs to be passed downstream. Each time the data is transformed,
it opens up opportunities for data loss or incorrect data to enter the
workstream. By having a decentralized data store, every entity has access
to a real-time, shared view of the data.
Reduces points of weakness

Decentralization can reduce points of weakness in systems where there

may be too much reliance on specific actors. These weak points could lead
to systemic failures, including failure to provide promised services or
inefficient service due to the exhaustion of resources, periodic outages,
bottlenecks, lack of sufficient incentives for good service, or corruption.

Optimizes resource distribution

Decentralization can also help optimize the distribution of resources so that

promised services are provided with better performance and consistency,
as well as a reduced likelihood of catastrophic failure.

Distributed Consensus in Distributed Systems

A procedure to reach a common agreement in a distributed or decentralized

multi-agent platform. It is important for the message passing system.
Example –
A number of processes in a network decide to elect a leader. Each process
begins with a bid for leadership. In traditional or conventional distributed
systems, we apply consensus to ensure reliability and fault tolerance. It
means, in a decentralized environment when you have multiple individual
parties, and they can make their own decision, then it may happen that some
node or some parties are working maliciously or working as a faulty
individual. So in those particular cases, it is important to come to a decision
or common point of view. So having a common point of view in an environment
where people can behave maliciously or people can crash the work in a faulty
way, is the main difficulty. So under this kind of distributed environment, our
objective is to ensure reliability which means to ensure correct operation in the
presence of faulty individuals.
Features :
• It ensures reliability and fault tolerance in distributed systems.
• In the presence of faulty individuals, it is Ensure correct operations.
Examples –
Commit a transaction in a database, State machine replication, Clock
synchronization.
How to achieve distributed consensus :
There are some conditions that need to be followed in order to achieve
distributed consensus.
• Termination –
Every non-faulty process must eventually decide.
• Agreement –
The final decision of every non-faulty process must be identical.
• Validity –
Every non-faulty process must begin and ends with the same value.
• Integrity –
Every correct individual decides at most one value, and the decided
value must be proposed by some individual.
Here is one validation criterion, So basically we should reach a decision with
a value that must be the initial value of some process because it is silly to
reach an agreement when the agreed value reflects nobody’s initial choice.
The correctness of Distributed Consensus Protocol :
It can be described by the following two properties as follows.
• Safety Property –
It ensures that you will never converge to an incorrect value or correct
individuals in a network will never converge to an incorrect value.
• Livenes Property –
It states that every correct value must be accepted eventually which
means something good will eventually happen.

Application of Distributed Consensus :

• Leader election in a fault-tolerant environment for initiating some
global action without introducing a single point of failure.
• Maintaining consistency in a distributed network. Suppose you have
different nodes monitoring the same environment. If one of the nodes
crashes, a consensus protocol ensures robustness against such
faults.

Atomic Broadcast
Atomic Broadcast is a communication primitive that ensures total ordering
of messages in distributed systems. This primitive is particularly useful to
maintain the consistency of replicated information despite concurrency
and failures. This paper addresses the problem of designing an Atomic
Broadcast protocol in an asynchronous distributed system where
processes can exhibit malicious failures (i.e., processes are Byzantine).
We point out the impact of those kind of failures on the modularity of the
protocol.
Byzantine Fault Tolerance Methods:

A Byzantine fault is defined as an arbitrary fault that occurs during the execution of
an algorithm by a distributed system. When a Byzantine failure occurs, the system
may respond in any arbitrary way unless it is designed to have Byzantine fault
tolerance. Byzantine fault tolerance is very critical because small arbitrary failures in
one node can bring down the whole system. When discussing fault tolerance, the
familiar terms synchronous and asynchronous has the following significance. A
synchronous system is one that responds within a known, finite amount of time, but
an asynchronous system does not.
Satoshi Nakamoto created Bitcoin in 2008, and he made the network very strong as
a distributed, peer to peer model which is maintained without any intermediaries.
Since then many digital currencies are created, which follow the same system where
all nodes are sharing same information (same copy of Block chain) and any node can
communicate with any other node safely across the network, knowing that they are
displaying same data.
Byzantine Fault Tolerance (BFT) is one of the most difficult challenges faced by the
Block chain technology. All the participants of the cryptocurrency network need to
agree, or give consensus regularly about the current state of the block chain. At least
(2/3) two thirds or more reliable and honest nodes in the network make it a reliable
network. If more than half of the nodes act maliciously, then the system has to face
the 51% attack, which is discussed in a separate article.
The concept of Byzantine Fault Tolerance in a cryptocurrency is the feature of
reaching an agreement or consensus about particular blocks based on the proof of
work, even when some nodes are failing to respond or giving out malicious values
to misguide the network. The main objective of BFT is to safeguard the system even
when there are some faulty nodes. This will also help to reduce the influence of
faulty nodes.
A Byzantine node is the tyrant node which can lie or intentionally mislead other
nodes of the network, and also the nodes which are involved in a consensus protocol.
As such the protocol should rise above the illicit intervention by the malicious nodes
and should operate perfectly, despite these Byzantine nodes.
There can be two categories of Byzantine Failures –
• There is genuinely a technical error in the node and it stops working or
responding.
• The other one is Arbitrary Node Failure. In case of arbitrary node failure,
the node may fail to return a result or deliberately respond a misleading
 result. It may also throw a different result to the different parts of the
system to mislead the system.
Byzantine Fault Tolerance is the way of overcoming these challenges by the
Cryptocurrency Network. The below table shows the various FT methods

Method Criteria Advantages Drawbacks

Local Proportion of Byzantine nodes Simple and efficient Does not work on grid
Broadcast in
each neighborhood algorithm
Explorer Connectivity of 2k+1 for k Criteria on the Tolerates at most 1
Byzantine topology of
nodes the network Byzantine failure on
grid
Control Byzantine node surrounded by Tolerates many Requires global
Zones a Byzantine
control zone failures with high knowledge
probability
Trigger Distance between Byzantine Tolerates many Weaker performances
nodes Byzantine than
failures without control zone
topology
knowledge
Fractal Byzantine rate λ Communication Only
5
works for λ< 10-
probability preserved
as
the diameter increases

Hash Pointers
A cryptographic hash serves as a checksum for a message. If a message has been
modified, it will yield a different hash. By associating a hash with a message, we
have a basis for managing the integrity of that message: being able to detect if the
message gets changed.

One way of associating a hash with a message is with the use of hash pointers.
Pointers are used in data structures to allow one data element to refer to another. In
processes, a pointer is a memory location. In distributed systems, a pointer may be a
name or IP address of a computer and object identifier. A hash pointer is a tuple that
contains a traditional pointer along with the hash of the data element that is being
pointed to. It allows us to validate that the information being pointed to has not been
modified.

Tamper-resistant linked-lists: blockchains

The same structures that use pointers can be adapted to use hash pointers to create
tamper-evident structures. For example, a linked list can be constructed with each
element containing a hash pointer to the next element instead of a pointer.
A blockchain
Adding a new block is easy. You allocate the block, copy the head hash pointer into
it (the next pointer), and update the head hash pointer to point to the new block and
contain a hash of that block.

If an adversary modifies, say, data block 1, we can detect that. The hash pointer in
Data-2 will point to Data-1 but the hash of Data-1 will no longer match the hash in
the pointer. For a successful attack, the adversary will also need to modify the hash
value in the hash pointer in block 2. That will make the hash pointer in block 3 invalid,
so that will need to be changed. The adversary will need to change all the hash
pointers leading up to the head of the list. If we’re holding on to the head of the list
(e.g., in a variable or some trusted storage) so that the adversary cannot modify it,
then we will always be able to detect tampering. A linked list using hash pointers is
called a blockchain.
Merkle Trees
Another useful structure using hash pointers in place of conventional pointers is a
binary tree, called a Merkle tree when implemented with hash pointers. Leaf nodes
of a Merkle tree contain conventional hash pointers: pointers to the data blocks and
the hashes of those data blocks. Non-leaf child nodes contain left and right pointers
along with the hash of the two hashes they point to. As with binary trees, Merkle
trees give us the advantage of being able to locate data in O(log n) time instead of
linear time. More importantly, we can validate any data in O(log n) time by traversing
from the root down to the last hash pointer at the leaf.

Applications of blockchains and Merkle trees

With Merkle trees, we are not necessarily building a search tree. The purpose of the
tree is to make it efficient to manage and validate the integrity of the underlying data.
That is, the hash pointer structure is there to allow you to validate the underlying
data rather than search for contents. If you want to search, you can add extra
information to each node. Hash pointers are all about helping assess the integrity of
data. Structures such as blockchains (hash-pointer-based linked lists) and Merkle
trees were designed with peer-to-peer systems in mind where data can come from
various untrusted peers. You just need to get the root hash from a trusted place.

The top-level pointer (the root pointer in the case of a tree; the head pointer in the
case of linked lists) represents the integrity of the entire set of data. If any data block
changes, that top level pointer will allow the user to detect that there has been a
change. Therefore, it is important that this value be stored securely and obtained via
a trustworthy mechanism.

A Merkle tree allows you to check the integrity of replicated data on a branch-by-
branch basis in an efficient manner. Merkle trees are designed for environments
where data is replicated among multiple systems and you want each system to be
able to validate the integrity of the entire file. This helps in two cases:

You can validate downloaded data without having to wait for the entire set of data
to be downloaded as long as you have the Merkle tree (which will generally be small
compared with the size of the underlying data, since it’s just a tree of hashes).

You can efficiently compare your data with that on another system.

Suppose you have a file and want to check whether any blocks in your version are
corrupted with respect to a version on another server. Both you and another system
assembled your own structure of hash pointers.

With a linked list of hash pointers, you’d start at the head of the list and compare
hashes. If the hashes match, you are confident that your files match. If you have a
mismatch, you need to compare the next hash. If it matches what you have then you
know that first block has been modified. If it doesn’t then you need to get the hash
after that. Ultimately, you may need to traverse the entire list linearly.

With Merkle trees, it becomes easier to find the block (or blocks) that have changed.
If the root hash matches, you know that your entire data set matches. If not, you
request the left & right hashes and compare those with your tree. If one doesn’t
match then you can compare the hashes under that subtree, iterating down the tree
until you find the mismatched data block. You do not need to iterate through the
entire list of blocks. This is attractive for replicated data sets where we may have
millions of data blocks, for example, and sending a hash list is not efficient. It
essentially enables a tree search to find the block that is inconsistent.

Merkle trees are particularly useful for obtaining data from multiple untrusted
sources. For example, they are used by Bitcoin and Ethereum servers to migrate
copies of the transaction log (the blockchain). They are also used for data replication
by a variety of NoSQL databases and by the Git version control system. Given a valid
root (top-most) hash pointer, the remaining hash tree can be received from any
untrusted source. The receiver can simply validate by checking hashes up to the root.
Now that the receiver has the entire tree, any data blocks can be received from
untrusted sources as well. Each block can be validated by comparing its hash with
the hash at the leaf node of the Merkle tree
Digital Cash :

Digital cash is a system of purchasing cash credits in relatively small amounts,

storing the credits in your computer, and then spending them when making
electronic purchases over the Internet. Theoretically, digital cash could be spent in
very small increments, such as tenths of a cent (U.S.) or less. Most merchants
accepting digital cash so far, however, use it as an alternative to other forms of
payment for somewhat higher price purchases. There are several commercial
approaches to digital cash on the Web. Among these are eCash from DigiCash and
Cybercash.
Digital cash can also be stored on an electronically sensitive card.