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The definition of an altcoin has evolved since the early days of cryptocurrency when only a handful of crypto assets existed. At the time, everything but Bitcoin (BTC) was considered an altcoin.
Today, the world of crypto-assets is much broader. There are a wide variety of coins and tokens with use cases that go far beyond a medium of exchange, meaning they are not necessarily Bitcoin competitors.
Still, for lack of a better term, the basic definition of an altcoin is any crypto-asset other than Bitcoin.
Here’s a look at the top 10 altcoins by market capitalization, excluding stablecoins. We excluded stablecoins as they are designed to maintain a stable price and are not typically considered a speculative investment.
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1. Ethereum (ETH)
Market cap: $223.3 billion
Of the $1.25 trillion representing the total market capitalization of the more than 26,000 cryptoassets available today, more than $200 billion is held in Ethereumthe largest altcoin on the market.
Unlike Bitcoin, characterized as a “decentralized currency”, think of Ethereum as a distributed computer network where users can use the blockchain to run decentralized applications (dApps) and host smart contracts.
“BTC is a store of value while ETH is a decentralized playground for builders to determine the future in the technological innovations of blockchain technology,” said Walker Holmes, vice president of metaverse platform MetaTope.
Critics of Ethereum point to high fees for conducting transactions. But with the thousands of applications and other altcoins powered by its blockchain, Ethereum is here to stay.
2. Binance Coin (BNB)
Market cap: $37.4 billion
Binance Coin is a utility token that can be used to pay trading fees and get discount deals on the Binance exchange. You can even use BNB outside of the Binance crypto exchange for payment processing, such as booking travel arrangements.
Critics say BNB is not as decentralized as other altcoins. Another risk is a reported Securities and Exchange Commission (SEC) investigation into whether Binance should have registered BNB as a security during its initial coin offering.
3. XRP (XRP)
Market cap: $36.2 billion
XRP can be used to facilitate exchange of different currency types with digital technology and payment processing company Ripple Labs. Although this altcoin has extremely low transaction fees, critics note that it faces legal challenges.
Ripple and two of its executives are involved in an SEC lawsuit that claims they should have registered XRP as a security, and the company says XRP is a currency instead.
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4. Cardano (ADA)
Market cap: $10.6 billion
Cardano was an early adopter of the proof-of-play consensus mechanism, which speeds up transaction time by removing the competitive and energy-intensive problem-solving dimension of platforms like Bitcoin.
“Cardano is an industry thought leader that has pioneered proof of consensus mechanisms,” says Holmes. “ADA is a blockchain solution that promises low fees with higher levels of security than many of its peers.”
But Daniel Logvin, CEO of blockchain network provider and consulting firm LedgerByte, says the altcoin over-promised and has yet to deliver.
5. Dogecoin (DOGE)
Market cap: $10.6 billion
Dogecoin is the original meme coin, known as a joke in 2013. Nevertheless, thanks to a dedicated community and creative memes, it quickly developed into a prominent cryptocurrency.
Richard Gardner, CEO of financial software provider Modulus Global, points out that DOGE has had some big supporters but is still riskier than Bitcoin.
“Altcoins like DOGE can fluctuate to extreme lows and highs depending on market volatility, as they have not yet proven real use cases,” said Garry Krugljakow, founder of 0VIX Protocol, a decentralized app that enables crypto lending and borrowing.
6. Solana (SON)
Developed to power decentralized finance and applications as well as smart contracts, Solana runs on a unique hybrid proof-of-stake and proof-of-history mechanisms to process transactions quickly and securely.
Solana is one of the fastest blockchains out there. Yet it has also faced criticism for being too centralized with very few validating nodes compared to Ethereum, said Whitney Setiawan, research analyst with digital assets Bitrue.
Holmes says Solana is a highly scalable blockchain solution with very low fees, but has seen outages and downtime.
7. Tron (TRX)
Tron was founded in Singapore in 2017. By December 2021, what started as a decentralized blockchain has grown into a fully decentralized autonomous organization (DAO). Today, Tron has more than 167 million accounts.
The cryptocurrency, which was worth just $0.0025 at launch, was worth $0.082 by mid-2023. That’s a 3,180% increase, turning Tron into one of the world’s fastest growing cryptocurrencies.
8. Litecoin (LTC)
Litecoin is one of the original altcoins, designed to improve several of Bitcoin’s perceived shortcomings, such as slow transaction processing speeds and mining monopolies. LTC was built to be used in everyday transactions, while Bitcoin has evolved into more of a “store of value.”
Litecoin also has some notable differences from Bitcoin. In addition to processing speed, there is the issue of supply. While Bitcoin is limited to a maximum supply of 21 million coins, Litecoin is limited to 84 million coins.
9. Polygon (MATIC)
Polygon is an Ethereum-based scaling platform that enables developers to build dApps with low transaction fees.
“It allows people to process transactions on top of the Ethereum network,” says Logvin. “This solution increases efficiency and saves tons of money on gas (transaction fees).” Gas fees, a transaction fee, are usually cheaper on Polygon than on Ethereum.
10. Polka Dot (DOT)
This altcoin powers the Polkadot ecosystem, where developers can build specific-purpose blockchains as spokes that connect to the main Polkadot blockchain hub, said Max Thake, co-founder of peaq, a blockchain network built on Polkadot. DOT is the native token for Polkadot.
“(There is) continued demand for DOT from projects aimed at building on Polkadot,” he says.
This altcoin has a better shared security and is a leader in developer activity and many projects, said James Wo, CEO of blockchain and cryptocurrency investment firm Digital Finance Group. But project progress has been slow, and it lacks star apps to boost its ecosystem, he says.
*Market cap and prices obtained from coinmarketcap.com, valid as of August 2, 2023.
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While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
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And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
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