Alternative cryptocurrencies

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Read an overview of some of the other cryptocurrencies and altcoins available to trade on our platform, including their individual features and how they differ to one another.

Dash

Dash is an open source cryptocurrency and an altcoin that was forked from the bitcoin protocol. It was designed to carry out transactions quickly and to have a swift governance structure in order to overcome the shortfalls in bitcoin. It is slightly different from some of the other main coins as it relies on a ‘decentralised autonomous organization’. This means that it’s run by a subset of users or ‘masternodes’ who perform all the basic functions, including hosting the blockchain and validating transactions, as well as making all important decisions and in a sense acting as ‘shareholders’. All transactions performed on the dash blockchain remain anonymous.

EOS

EOS is the native cryptocurrency that powers the EOS.IO blockchain protocol, which operates as a smart contract platform and decentralised operating system. Developers can use EOS.IO to build applications, and owning EOS coins is a claim on server resources. The aim of the platform is to provide a decentralised application hosting, smart contract capability and decentralised storage of enterprise solutions that solve the scalability issues of the more recognised blockchains like bitcoin and ethereum. The operating system itself is hosted by ‘block producers’ who, like bitcoin miners, maintain the blockchain and are rewarded in EOS as an incentive. 

Although the EOS blockchain is very similar to ethereum, it focuses on making the interaction between the end user and the blockchain more user-friendly. EOS also differs in the sense that it does not charge per transaction as it is fundamentally a service for application developers. 

Monero

The prime focus of the monero blockchain is confidentiality and untraceable transactions. Most cryptocurrencies (including bitcoin) have transparent blockchains, which means that all transactions, including sending and receiving addresses, can be traced and potentially linked to real-world identities. Monero uses cryptography to conceal sending and receiving addresses, as well as transaction amounts.

Monero uses a proof of work mechanism to issue new coins and incentivise miners to secure the network and validate transactions.

NEO

NEO is a smart economy platform which automates the management of digital assets using smart contracts. The cryptocurrency community has referred to NEO as ‘Chinese ethereum’. It’s backed by the Chinese government as a part of its strategy to establish themselves a blockchain industry leader.

NEO is 100% pre-mined, so when NEO is purchased, the buyer receives tokens as a part of previous issuance, making it a centralised system. NEO holders have the rights to manage and make decisions for the network (including maintaining the blockchain through proof of work), and are rewarded by GAS, a cryptocurrency token issued on the NEO platform. NEO holders do not necessarily need to do any proof of work to earn GAS. NEO tokens generate GAS tokens for its holders for simply holding it.

GAS is needed in order to use smart contracts and the NEO platform, which presumably creates a pressure on the demand for NEO, driving up its price, thus attracting more users. 

Stellar lumens

Stellar is a payment network which uses its own token – lumens. It acts as an intermediary for international transfers, making cross-border payments more efficient. Stellar has introduced its own network, the Stellar Consensus Protocol.

The stellar payment network is supported by a system of decentralised servers which host the ledger that keeps track of the network’s data and transactions. The individual and entities providing these servers are rewarded in lumens.

To make a payment, the payer would upload funds to an ‘anchor’ in the stellar network, which would then issue lumens in the payer’s virtual wallet. The payer will then be able to transfer lumens to the receiver instantaneously, without having to wait for a bank. If the currencies of the parties are different, stellar would use the best available exchange rate to convert lumens to the currency of the receiver’s wallet.

Cardano

Cardano is home to the ADA cryptocurrency, which can be used to send and receive digital funds. This digital currency enables fast, direct transfers that are guaranteed to be secure through the use of cryptography.

Cardano is developing a smart contract platform which seeks to deliver more advanced features than anything previously developed. The protocol features a layered blockchain software stack that is flexible, scalable and is being developed with academic and commercial software standards at the heart of its philosophy. Cardano uses a democratic governance system that will allow the project to evolve over time and fund itself sustainably. 

Tron

Tron is a blockchain-based operating system and decentralised application platform. The main focus of the Tron Group is to prove that the internet should be utilised as an asset for everyone, rather than as a profit-making tool for a very small core of businesses. Tron allows creators of digital content to sell directly to consumers rather than having to sell their apps or content via an ‘app store’, thus placing control back into the creators’ hands.  

Chainlink (LINK)

Chainlink is a decentralised network of oracles, which acts as a middleware between blockchains and off-chain systems to allow smart contracts to interact with real-world information in a highly secure and reliable manner. Although initially built on ethereum, chainlink is blockchain-agnostic and is designed to work across various blockchains that have smart contract functionality.

To avoid any centralised point of failure, the chainlink network doesn’t rely on a single oracle. Instead, it consists of independent oracles that collectively retrieve data from multiple sources to deliver a single, validated data point to the smart contract, to trigger execution. LINK, the native token of the protocol, is commonly used to pay chainlink network operators to ensure the accuracy of this oracle service.

Polygon (MATIC)

Polygon (previously matic network), often referred to as “Ethereum’s Internet of Blockchains”, is a protocol and framework for creating blockchains scaling solutions for ethereum-compatible blockchain networks. It’s designed to overcome some of ethereum’s major limitations, including low throughput, poor user experience (high gas fees and delayed transactions) and lack of community governance. One of the main focuses of polygon is to transform ethereum into a multi-chain ecosystem, with its interoperability protocol for exchanging arbitrary messages with ethereum and other blockchain networks through secured Layer 2 chains and standalone chains. With polygon, developers can deploy preset ethereum-compatible blockchains and customise blockchains with a growing range of modules with more specific functionality. 

Polygon still uses the same utility token (MATIC) for a broad range of purposes in the polygon ecosystem, including payment of transaction fees, contributing to the network security through staking, and participating in network governance.

Dogecoin (DOGE)

Dogecoin is a peer-to-peer, open-source cryptocurrency which was created in 2013 as a light-hearted alternative to traditional cryptocurrencies. The name and logo feature a meme of a Shiba Inu and the misspelt version of the word “dog”. Dogecoin is described as the “fun and friendly internet currency” that can be used for payments and purchases, including tipping content creators on social media. 

Dogecoin is a fully-fledged cryptocurreny with its own blockchain, that employs a similar mining system to the one used by litecoin. As such, dogecoin and litecoin can be mined simultaneously without impacting operational efficiency. Unlike a vast majority of cryptocurrencies, dogecoin is inflationary, with unlimited supply and 10,000 new coins mined every minute. 

Ethereum classic (ETC)

Ethereum classic is a decentralised blockchain-based cryptocurrency platform that executes smart contracts as programmed, without the possibility of downtime, censorship or third-party interference. It came about as the result of a controversial hard fork on the ethereum blockchain in 2016, after which ethereum (ETH) mainline created a new network which is moving to a new consensus mechanism called “Proof-of-Stake”. The older network was renamed ethereum classic (ETC), which preserves the pre-fork version of the ethereum blockchain without abandoning the philosophy of the immutability of the blockchain. 

Ethereum classic and ethereum are similar in terms of their basic functionalities of building smart contracts and decentralised applications (dApps). The primary distinction is that ethereum classic is incompatible with the updates on the new ETH blockchain due to the nature of a hard fork.  

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​​CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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