70 TPS dApp Scaling, Low Transaction Fees & Price Leaps with $QTUM: Is This Blue Chip Altcoin Taking Over BTC & ETH?

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How to buy QTUM. Comprehensive guide on understanding… | by Vaz Reddy |  HackerNoon.com | Medium

BTC and ETH have always been known as the ‘safe’ cryptocurrency options, and the obvious options for beginner investors. With QTUM being a competitive combination of both of these coins, it looks like its popularity is increasing – evidenced by the price leap from 2 days ago. Which other Altcoins are looking promising?

Key Points

  • Bitcoin and Ethereum have benefited immensely from their respective first-mover advantages.
  • However, three cryptocurrencies are superior to the “Big Two” in multiple respects.

Although the stock market has historically been one of the world’s greatest wealth creators, many well-known cryptocurrencies have run circles around the broad-market indexes in recent years.

This includes the “Big Two” of the crypto community, Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH).

Over the trailing five-year period, through Jan. 16, the benchmark S&P 500 was higher by 105%. By comparison, Bitcoin and Ethereum had rocketed to respective five-year gains of close to 5,200% and 34,200%.

A neatly staggered stack of one hundred dollar bills transforming into digital currency on blockchain.

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Popularity aside, Bitcoin and Ethereum come with risks

It’s not hard to understand why investors are so excited about the two largest cryptocurrencies by market cap. After all, they both offer first-mover advantages. Bitcoin was the first tradable digital currency, and not surprisingly is accepted by more merchants than any other token. It also became legal tender in El Salvador this past September.

Meanwhile, Ethereum was the first smart contract-based blockchain network to debut. Smart contracts are the protocol that verify, facilitate, and enforce the negotiation of a contract between two parties. Smart contracts are what broaden the application of blockchain technology beyond just making payments to include everything from digital IDs to supply chain management.

Yet, while there are perfectly good reasons for Bitcoin and Ethereum to be No. 1 and No. 2 in market value among cryptocurrencies, there are visible red flags as well. As a cryptocurrency skeptic, I’ve previously covered a number of these concerns.

For instance, investors have a long history of overestimating the uptake of new technology. While I do believe that blockchain can become a mainstream technology in the future, it’s going to take a long time for it to replace existing infrastructure. Thus, the entire crypto space could be facing a sizable reversion over the coming years as expectations deflate to match what’s been minimal real-world application.

I’d also caution that early generation cryptocurrencies, like Bitcoin and Ethereum, are constantly being diluted by new blockchain projects. Even though most projects won’t amount to much, at least a handful of these unique projects will offer a competitive edge over the “Big Two.”

Gold-colored physical Bitcoin set atop a smartphone that's displaying crypto quotes and charts.

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These digital currencies are far more exciting than the “Big Two”

However, being a skeptic doesn’t mean I view the digital currency space as inherently bad news. Just consider me far pickier than the typical investor analyzing cryptocurrencies. In order for a cryptocurrency to have long-term, real-world appeal in my eyes, it needs to possess a competitive edge and differentiation. That’s why I find the following three cryptocurrencies to be far more exciting than Bitcoin and Ethereum.

Avalanche

The first digital currency that has long-term appeal is Avalanche (CRYPTO:AVAX), which at the time of this writing was worth $22 billion and ranked 12th among the largest cryptocurrencies.

Avalanche is a smart contract-based blockchain network that’s superior to the “Big Two” based on its speed, scalability, and compatibility.

Bitcoin and Ethereum may be popular, but that popularity can be bad news for their networks. According to data from BitInfoCharts.com, Ethereum’s average transaction fee has been north of $20 since the beginning of October, while Bitcoin’s average transaction fee has predominantly been above $2 over the same time frame. Additionally, Bitcoin and Ethereum can only process a respective seven transactions per second (TPS) and 13 TPS, with each transaction finalizing (i.e., validating and settling) in 60 minutes and six minutes.

Now, compare these figures to Avalanche, whose network is capable of processing more than 4,500 TPS and finalizes transactions under two seconds. I repeat, under two seconds! What’s more, the typical Avalanche transactions will cost significantly less than either Bitcoin or Ethereum.

What’s particularly intriguing about Avalanche is the incorporation of the Ethereum Virtual Machine (EVM) on its blockchain. The EVM is the software that allows developers to create decentralized applications (dApps) on the Ethereum blockchain. Avalanche has effectively taken the most popular dApp tool on the planet and placed it on its super-efficient network where processing speeds and transaction fees are more favorable.

A person touching an encrypted digital block that's part of a larger blockchain.

IMAGE SOURCE: GETTY IMAGES.

Qtum

For investors who absolutely love the blue chip cryptocurrencies, Qtum (CRYPTO:QTUM), pronounced “Quantum,” is far more exciting.

Once one of the larger digital currencies by market value, Qtum has fallen just outside the top 100 and now sports a market cap below $1 billion. But don’t let its size fool you — this blockchain-based network is built with competitive advantages in mind.

The secret to Qtum’s success is that developers took the best aspects of Bitcoin and Ethereum and combined them into a single network. From Bitcoin, Qtum’s developers are employing the highly secure UTXO transaction model. Meanwhile, from Ethereum, the network is utilizing smart contract capability. Whether people are sending money or handling more complex transactions, it can all be done on Qtum’s network.

Something else worth noting is that the EVM is compatible with Qtum’s blockchain network. This means dApp developers can enjoy better scaling (up to 70 TPS) and considerably lower transaction fees, relative to Ethereum.

Another differentiating factor with Qtum is its Account Abstraction Layer (AAL). The AAL is the technical component that ensures developers can continuously upgrade smart contact capabilities on the network, yet still remain compatible with the UTXO transaction model.A digital map of the world, partially filled in by binary code and blockchain nodes.

IMAGE SOURCE: GETTY IMAGES.

Algorand

The third cryptocurrency I find far more exciting than Bitcoin and Ethereum is smart contract-driven blockchain network Algorand (CRYPTO:ALGO).

Like Avalanche, Algorand stands out because of its competitive edge over the “Big Two” and its differentiation. For example, a December update from Algorand’s development team showed that it offered an average block finality of 4.36 seconds and was capable of processing 1,162 TPS. Keeping in mind that the typical cross-border payment with existing infrastructure takes up to a week to validate and settle, Algorand’s network finalizing payments in 4.36 seconds is a night-and-day advantage for the future of finance.

What I find particularly intriguing about Algorand is the emphasis it’s placed on interoperability. There are currently around 17,000 cryptocurrencies listed on CoinMarketCap.com, and presumably thousands upon thousands of other blockchain projects in the works. While some of these projects will be compatible with each other, there’s a good chance many won’t be. Algorand has a true focus on bridging these compatibility gaps to ensure money, files, and data can be exchanged quickly and in a secure manner.

A final advantage for Algorand is the network’s unique consensus mechanism, known as pure proof of stake (PPoS). With traditional proof-of-stake blockchain, it’s possible for small holders of a token to disrupt a network. Algorand’s PPoS, which randomly and secretly chooses ALGO holders to vote on proposals and propose blocks, virtually eliminates this potential for network sabotage.

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