Evolutionary processes in the world of cryptocurrency do not stand still, and changes are constantly occurring, but the main issue that is interesting for both experts and newcomers is which of the cryptocurrencies will become the next bitcoin. In this regard there are several opinions, and each of them isn’t meaningless. Of the existing currencies the most likely competitors of BTC are Ripple and Ethereum.
Table of content:
- BTC weaknesses which can be harmful in the future
- Ethereum and its additional opportunities
- Ripple as “the new Bitcoin”. Experts’ opinions
- Conclusion: what about centralized crypto?
Weak points of Bitcoin
Why should Bitcoin give its place to “someone” else? After all, this digital asset is a coin “number one”, its capitalization is the highest, and in terms of popularity, people who do not even know about cryptocurrencies, have heard of it at least once. However, Bitcoin is characterized not only by its benefits, but also has some shortcomings that make it lose to some its best altcoins. In this case, alternative coins are created on its open base code. What kind of weak points will we talk about?
The impossibility of full consensus
The idea of consensus, which Satoshi Nakamoto has chosen as the main bitcoin policy, is a big problem. The fact that all program changes occur with the consent of the entire cryptocurrency community is not the best solution in many cases.
Is it necessary or not to increase the block size in the bitcoin chain? This issue is a big challenge and until now complete agreement on it has not been achieved, which negatively affects the image of the “number one” cryptocurrency. But not only the reputation is damaged in this case, but also a scalability of the network.
Unconfirmed money orders
200 thousand - such an amount of unconfirmed money transfers is characteristic of Bitcoin. Is it possible to say that any cryptocurrency is the fast and cheap way to make transactions? Time, distance, the country in which the user of the network is located - all this shouldn’t matter ideally.
Undoubtedly, the owners of crypto would like to be anonymous when making transactions. Does BTC provide such a possibility? Many of its altcoins are more anonymous, for example, Monero. Bitcoin transaction can be traced, if desired.
Errors that can not be solved
Since there are no intermediaries and a centralized management body in the network of bitcoins, transactions become faster and cheaper, but there is a big drawback here. If the wallet address was mistakenly entered and funds were sent to it, there is no way to withdraw them.
There is a problem of volatility for all types of cryptocurrency. There are reports that 1 million bitcoins are reserved on Satoshi Nakamoto's wallets. If these assets are thrown out to the global market, the liquidity of bitcoin will drop sharply along with the value.
Lack of security
A competitor, which can become the next bitcoin, is unlikely to be provided with anything in the near future. BTC and all its altcoins are kept afloat only at the expense of network participants’ trust and the alphanumeric code is only a technological solution.
The influence of information
Since the value of crypto coins is based on the network effect and the human factor, then any news - both true and fake - can greatly affect the rates. A short virus message in social networks can greatly damage the reputation of a particular cryptocurrency.
Ethereum as the next bitcoin: more than a currency
When we talked about the weaknesses of bitcoin, we repeatedly pointed out that many of these shortcomings are inherent not only to it, but also to other types of cryptocurrency. Ethereum has a number of problems, but despite this, it is often associated with the main rival of bitcoin. ETH also demonstrated tremendous growth and gained great popularity. Mining Ethereum by analogy with BTC is carried out according to the PoW system, i.e. for this purpose the equipment is used and the result depends on its capacity. The mechanism of confirmation is decentralized. Crypto is built on the basis of the blockchain.
And now it's worth telling about the differences. Bitcoin was created as a digital alternative to the fiat money, but already with a decentralized system, without the participation of government agencies. This means that your finances will not be arrested or “frozen”, and transactions will be made faster and cheaper. In its turn Ethereum is not only a crypto coin, but also a whole platform for the developing of applications, entering into contracts and solving a number of tasks, not only in the financial sphere, but also in science, management, etc. Thanks to the special structure of the ETH blockchain it becomes possible.
Of course, Ethereum can be used for calculations, purchases and sales, but its capabilities, as already said, are much wider. It is a ready network that can be compared to the Internet. Decentralized applications act as websites. On such a network, you can send messages; carry out internal transactions involving domestic currency. As the next bitcoin but with a wider functionality and capabilities, Ethereum can be used in the IT sphere, to launch start-ups, investments, and business projects.
Ripple as an aspiring candidate for Bitcoin
Some interesting ideas were expressed in his article “Ripple Could Be The Next Bitcoin” written by the analyst Panos Mourdoukoutas. The material was published in early March 2018 in the prestigious Forbes magazine. The analyst noted that thanks to the bitcoins, many people became very rich. Among them there are those who bought digital gold for a price of several USD! But at the moment no one can say with absolute certainty that the investment will bring the same result. The Ripple coin is kept at the level of $ 1, but there are quite a few experts who are sure that the fate of the next bitcoin will be shared by XRP
Another crypto-optimist is Craig Cole from CryptoMaps. He believes that Ripple will be the main “kick” for the development and implementation of cryptocurrency in general. The high speed of transactions and their low cost is a panacea for overloaded financial systems. Due to this, institutions could save money and make payment flows more dynamic. That is why XRP can be considered one of the most likely candidates for the title of leader.
John-Paul McCaffrey from Long Island University is confident that the exchange platform for the fiat money and Ripple will appear pretty soon. Coinbase according to McCaffrey is the first service, where this opportunity will appear. The exchange is one of the most popular and it’s high liquidity will play a positive role in the development and implementation of Ripple in the financial system of the future and, as a result, will increase the chances of this cryptocurrency for leadership.
According to the point of view of Roman Guelfi-Gibbs, who is a developer of Pinnacle Brilliance Systems Inc, Ripple has all chances to rise in 2018 - 2019. But there are other projects working on equally effective algorithms, and also being contenders for the role of the main digital tool in the financial world. Here the expert mentioned Ethereum. At the very least, investors should closely monitor Ripple's development in order to respond to changes in time.
Not all expert opinions are positive. Shidan Gouran, the president of Global Blockchain Technologies, relies on capitalization in dollar terms. Bitcoin has 191 billion, Ethereum 84, and Ripple only 49. In order to become the next bitcoin the subject must cover somehow this huge gap, the amount of which equals the GDP of Iceland. Also, according to the expert, Ripple is more suitable for trading assets, and not as a daily cryptocurrency.
So, we see that with all its shortcomings, Bitcoin remains and, most likely, will be a long-term cryptocurrency “number one”. The main competitors have chances to become the next bitcoin, but no one knows how the forks will behave, for example, Bitcoin Cash, which is gaining strength now. Another common hypothesis relates to the issuance of cryptocurrencies by the governments. Centralized cryptocoins are a real challenge to all existing digital assets, and according to the forecasts their release will take place in the next five years.