Which is better bitcoin or blockchains

Comparison portal

Bitcoin is the prime among the cryptocurrencies - what role it will play in the future is uncertain: Some experts believe that it will only serve as an investment. The assumption is not unfounded - if you look at the technologies on which the individual cryptocurrencies are based, many are already more advanced than the Bitcoin blockchain.

The Ethereum blockchain only needs a few seconds to create a block and is therefore many times faster than that of Bitcoin. IOTA, for example, is based on a completely different technology - the Tangle.

More mass than quality

Coinmarketcap currently lists 3,841 different cryptocurrencies - plus those that are not officially listed. Many cryptocurrencies have a specific purpose, others are purely speculative. Tokens, which, strictly speaking, are not real cryptocurrencies, serve as a payment method for fees from decentralized applications.

At the moment, the areas of application of individual cryptocurrencies are still very limited and it is uncertain which coins will prevail in the long term. The best-known altcoins - i.e., alternative coins to Bitcoin - include Ethereum, Ripple, Bitcoin Cash, Litecoin and IOTA.

Ethereum (ETH)

In terms of market capitalization, Ethereum is the second largest cryptocurrency. However, the value for a single coin, i.e. the ether, is much lower than that of the bitcoin. The two cryptocurrencies are similar in many ways: Both are digital and decentralized, but unlike Bitcoin, Ethereum does not have a fixed upper limit.

Ethereum is open source and therefore programmable. This means that developers can create so-called distributed apps (DApps) based on blockchain technology and thus provide the foundation for smart contracts. Such applications then benefit from numerous advantages over normal sales contracts: For example, independence from a central organization, lower costs and increased efficiency.

Ethereum supporters are numerous

The community is considered to be the largest within the blockchain and due to the technological progress compared to the Bitcoin blockchain, many believe in the long-term success of Ethereum. The list of companies that use Ethereum is also impressive: JPMorgan Chase, Intel, Microsoft and other well-known companies founded the “Enterprise Ethereum Alliance” (EEA) with the aim of integrating Ethereum technology into their own IT.

At the beginning of December 2020, Ethereum will switch its computationally intensive proof-of-work process to a so-called proof-of-stake process: This is intended to massively increase transaction capacity in the long term. The upgrade is called Ethereum 2.0 and consists of three phases.

You can buy Ethereum on almost all common crypto exchanges or marketplaces: For example, on Binance, Etoro or Kraken.

  • 19 cryptocurrencies - new since May 2021: Dogecoin
  • Payment methods: including credit card, SEPA transfer, PayPal
  • Security: 2FA, SSL, deposit protection € 20,000
  • Important: Cryptoassets are highly volatile, unregulated investment products (your capital is at risk).

Ripple (XRP)

Ripple is a payment network that is based on a protocol and enables money transfers in real time: For this reason, Ripple is particularly interesting for banks. The underlying token is called XRP.

Ripple's transaction capacity is significantly higher than that of Bitcoin, which is an acute problem for Bitcoin: Bitcoin is struggling with scaling problems due to its high market capitalization - transactions take longer and are associated with additional costs. The structure of Ripple, on the other hand, theoretically enables 50,000 transactions per second. For comparison: The credit card provider VISA speaks of a possible 24,000 transactions per second.

The innovation is the protocol

Banks in particular find this idea interesting - international payments in particular are time-consuming and costly. If the Ripple protocol were to be standardized worldwide, payment transactions could be significantly accelerated and fees saved.

The Ripple Token XRP would theoretically be interchangeable: Opinions are divided here. Critics warn that when the tokens were issued, the developers withheld a large part, which contradicts the decentralized idea. XRP is also not an actual part of the innovation, which is the system around the protocol.

Even if the system prevails, banks could use their own tokens for payment transactions - at the same time, this would in turn jeopardize the low fees.

  • EUR / USD from 2 pips
  • Payment methods: including credit card, SEPA transfer, PayPal
  • No deposit fees
  • 76.4% of retail CFD accounts lose money.

Well-known competition endangers standardization

In addition to Ripple, there are other companies that want to revolutionize payment transactions in the banking system: These include SWIFT, Stellar or R3. Nevertheless, Ripple already has many supporters - in the form of large banks and financial service providers such as UBS, Santander or MoneyGram.

Ripple can be purchased on many well-known crypto exchanges: The providers on which you can buy XRP tokens include eToro, Kraken or Binance.

  • Trade: Over 150 coins, futures and derivatives
  • Deposit via SEPA transfer free of charge
  • Trading fee: 0.1 percent
  • Security: 2FA, SSL, Binance Trust Wallet, Anti-phishing Code, Address Management
  • iOS & Android app
  • No deposit fees via bank transfer
  • Trading fee up to USD 50,000: maker order 0.16% / taker order 0.26%
  • Security: 2FA, PGP / GPG, cold wallet, master key
  • Regulation: FinCEN

Bitcoin Cash (BCH)

Bitcoin Cash is a hard fork: A fork describes the further development of software - mostly open source technologies that anyone can freely modify. In the case of Bitcoin, it is the blockchain's computer code that is open-source and therefore unrestrictedly accessible.

The special thing about the blockchain, however, is not just its computer code, but above all the network: If there is a change in the code, all users of the network must agree.

On August 1, 2017, users of the Bitcoin blockchain argued about the scaling of the network: The block size should be increased from 1 MB to 8 MB and an important protocol update introduced - not everyone in the community agreed. The solution to the problem was to split off - i.e. a hard fork - the new blockchain: The result was the Bitcoin Cash blockchain.

Another hard fork

The Bitcoin Cash Blockchain has already experienced two hard forks - the last one in mid-November 2020. The reason for the dispute this time was the introduction of a tax for miners - the aim was to finance maintenance and further developments of the BCH ecosystem in order to remain competitive with Bitcoin and Ethereum .

Bitcoin Cash Node (BCHN) takes over the Bitcoin Cash blockchain without a mining fee: Since this is also the longer of the two blocks, it remains listed on the crypto exchanges. Bitcoin Cash ABC, the second hard fork, on the other hand, suffers from a very low hash rate, which makes the network vulnerable to attacks. 51 percent attacks and thus a loss of control over the blockchain are possible.

Investors can purchase Bitcoin Cash at bitcoin.de or Binance, among others.

  • No deposit necessary
  • Trading fee 0.5%
  • 5 cryptocurrencies
  • Trade: Over 150 coins, futures and derivatives
  • Deposit via SEPA transfer free of charge
  • Trading fee: 0.1 percent
  • Security: 2FA, SSL, Binance Trust Wallet, Anti-phishing Code, Address Management
  • iOS & Android app

Litecoin (LTC)

The idea behind the Litecoin was to create a better version of its "big brother" Bitcoin - accordingly, it is a soft fork. Litecoin has been available as a cryptocurrency since 2011. The system is very similar to the Bitcoin model - just a bit leaner and lighter.

The upgrade was particularly successful in terms of the processing speed of the blockchain: this is four times faster than that of bitcoin. In the Litecoin network, a new block can be generated about every 150 seconds - in the Bitcoin network this takes about 600 seconds. Due to the four times the speed at which currency units are created, the total amount of all Litecoins is 84 million - with Bitcoin it is 21 million.

Alternative mining algorithm reduces fees

From a user perspective, there is another big advantage: lower transaction fees. The Litecoin relies on a different mining algorithm, the Skyrpt. This is less computationally intensive, which is why the transaction costs are significantly lower.

Litecoin is not really revolutionary - despite its proximity to Bitcoin, the price of a single coin is many times lower. His network often serves as a “test ground” for innovations in terms of performance or architecture. If these are successful, they may also be used in the Bitcoin network.

Litecoin is relatively popular with investors and has been among the top 10 coins with the largest market capitalization for years. You can buy Litecoin on crypto exchanges such as Binance, Kraken or Coinbase.

  • No deposit fees via bank transfer
  • Trading fee up to USD 50,000: maker order 0.16% / taker order 0.26%
  • Security: 2FA, PGP / GPG, cold wallet, master key
  • Regulation: FinCEN
  • Fees: 1.49% on the total amount
  • Spread: 0.50
  • Regulation: FinCEN

IOTA (MIOTA)

Unlike most cryptocurrencies, IOTA is not based on a blockchain - as a distributed ledger it uses the tangle approach: there are no chains, blocks and miners.

The heart of the IOTA network are the nodes - the entirety of the interconnected nodes form the IOTA network. If a transaction occurs within a node, the node forwards the information about it to its neighboring nodes: They in turn have to validate the transaction and save it in their local copy of the Tangle.

With IOTA, the developers wanted to create a payment network for the Internet of Things (IoT). These are networked machines that communicate and act with one another: For example, a stationary car that automatically pays parking fees at a parking machine in the network.

If a large number of these micropayments are carried out at the same time, it also requires a large number of users so that enough nodes are available to confirm the transactions.

Justified criticism

The IOTA network advertises with high scalability and the elimination of transaction costs. There is criticism for the lack of decentralization: The individual nodes flow through the coordinator node, which is held by the IOTA Foundation. Incidentally, their headquarters are in Germany.

Since IOTA is well aware of this criticism, the coordinator node is to be abolished in the future. We are currently working on the implementation of IOTA 2.0. The process will take some time, but it should bring significant improvements. IOTA 2.0 is currently still on a test server.

Among other things, the developers want to abolish the Trinity wallet and promote standardization of the IOTA protocol: standards are essential for global functionality.

The big hype about IOTA was especially in 2017 when even Bosch invested a million amount in the technology. Investors can currently purchase IOTA on Binance or eToro.

  • Trade: Over 150 coins, futures and derivatives
  • Deposit via SEPA transfer free of charge
  • Trading fee: 0.1 percent
  • Security: 2FA, SSL, Binance Trust Wallet, Anti-phishing Code, Address Management
  • iOS & Android app
  • 19 cryptocurrencies - new since May 2021: Dogecoin
  • Payment methods: including credit card, SEPA transfer, PayPal
  • Security: 2FA, SSL, deposit protection € 20,000
  • Important: Cryptoassets are highly volatile, unregulated investment products (your capital is at risk).