Important Cryptocurrencies Other Than Bitcoin

Bitcoin: the pioneer of cryptocurrencies

Bitcoin was the first digital asset that caught the attention of the public and became widely used. It is not a stretch to say that Bitcoin defined our current concept of cryptocurrency. When Satoshi Nakamoto launched the Bitcoin network in 2009, in the wake of the global financial crisis, they unknowingly jumpstarted a whole new asset class market beyond those of fiat, stocks, bonds, and precious metals.

Bitcoin has earned the moniker “digital gold” because of its scarcity and therefore its potential role as a store of value—along with its creation coming from “ mining”. However, Satoshi envisioned Bitcoin as an electronic cash system that offered an alternative to traditional fiat currencies. Although others have tried to build other functionality into Bitcoin’s network through projects such as ordinals, runes, and smart contract capability (e.g., BitVM), these two roles—as a way to store and transfer value—remain at the heart of BTC.

Crypto beyond Bitcoin

What Satoshi could not anticipate was the innovation that followed in Bitcoin’s footsteps. Fast-forwarding slightly more than a decade, cryptocurrencies would become much more than ways to store and transfer value. They became networks that ran complex computer programs, collectables, digital forms of fiat, memes, supply chain logistic managers, fundraising mechanisms, and interconnected ecosystems of financial tools.

Non-Bitcoin coins and tokens were given the name “altcoins” (alternative coins), but this designation undersells their importance. Crypto would not be as popular today without the breakthrough uses of cryptographic and blockchain technology introduced by some of the assets below—among others. This is not an exhaustive list of the most important cryptocurrencies, since that roster is ever-changing, but it provides a helpful basis for the crypto that has helped define the space.

Ethereum (ETH)

Ethereum (ETH) is perhaps the only altcoin that could make a case for being a “blue chip” like Bitcoin. Introduced by founder Vitalik Buterin in 2013 and launched two years later, Ethereum was the first blockchain network that supported smart contracts. This completely changed how the community saw the role of crypto as a technology. Although Bitcoin, Litecoin, and Ripple were already on the market, these assets only promised the basic functionality of value transfer. However, the Ethereum Virtual Machine (EVM) made decentralized applications (dapps) possible, ultimately fueling decentralized finance (DeFi), non-fungible tokens (NFTs), and more.

Tether (USDT)

ether (USDT) is a stablecoin that maintains a “peg” (stable value) to the US dollar. This is vital for cryptocurrency traders who may want to exchange their more volatile crypto (like BTC and ETH) for a fixed-value asset. Buying and selling cryptocurrency using fiat can have tax implications, and DeFi platforms like Uniswap and Curve are not able to interface with the traditional financial system. USDT is operated by a privately-owned company that holds assets in reserve to back the USDT they issue. Tether was the first stablecoin, but it—like Bitcoin—sparked an industry. USDT’s model is a similar to those like Circle’s USDC stablecoin, but different than algorithmic stablecoins like Maker’s DAI.

Solana (SOL)

olana (SOL), like Ethereum, is a layer 1 blockchain network (L1) that has smart contract capability. Other L1s include Cardano and Avalanche. Though Ethereum is often criticized as suffering from slower throughput and more expensive transactions because of its priority on security (components of the blockchain trilemma), Solana was built with an emphasis on speed and scalability. It uses a novel way of recording time on the blockchain, called Proof of History, which enables parallel transaction processing. DeFi has historically been a major development consideration on Solana, since high-speed transactions lend themselves well to financial markets.

Chainlink (LINK)

Chainlink (LINK) may not be the cryptocurrency most mentioned in the media, but its behind-the-scenes underpinning of crypto and DeFi markets is unmatched. As a decentralized oracle network, Chainlink makes sure that siloed blockchain ecosystems are able to connect with 1) each other, and 2) the outside world. By collecting, collating, and providing real-world data in a reliable way, users of smart contracts can rely on their transactions being processed as planned. This is vital for the operations of decentralized exchanges like Uniswap, derivatives platforms like dYdX, and asset tokenization projects. Without oracles like Chainlink, crypto could not exist in the form we know today.

Polkadot (DOT)

Polkadot (DOT) is a network of blockchains, similar in design to Cosmos. Sometimes, Polkadot is referred to as a “layer 0 network” because it supports multiple L1s that are called parachains. These purpose-built chains are able to provide specific functionality to their userbases, but they borrow security from a shared Relay Chain. Polkadot was developed by one of Ethereum’s co-founders, Gavin Wood, and its economics partially revolve around how parachains are chosen through auctions.

Ripple (XRP)

Ripple (XRP) is a financial institution that develops the XRP Ledger, a type of distributed ledger technology (DLT) that is *not *a blockchain. Ripple has been around since 2004 and experienced a crypto-based rebirth in 2012. Its long history in the digital asset space has given it a (relative) first-mover advantage that has translated to lasting power, despite highly public legal battles with regulators. XRP is designed to provide a way to transact value (e.g., for payments) in a similar way to fiat currencies.

Dogecoin (DOGE)

Dogecoin (DOGE) is the world’s first memecoin. It was initially created as a reference to the Doge meme from the early 2010s. Dogecoin’s technology is based on the same infrastructure as Litecoin’s, which itself is a fork of Bitcoin’s code. However, its technology is not what makes DOGE important. Instead, it is the trend it inspired: memecoin popularity increased significantly with each bull market that followed, and new entries like SHIB called back to DOGE’s trailblazing status.

Important cryptocurrencies essentials

• Bitcoin pioneered the concept of a cryptographically secured digital asset, but its simple functionality of storing and transferring value was only the beginning of the crypto story.

• Some of the most important cryptocurrencies other than Bitcoin include smart contract coins, tokens that power decentralized oracles, and memecoins.