Since the birth of cryptocurrency in 2009, Bitcoin has had a significant hold over the industry, never once losing its lead in market share. However, over time other digital currencies with faster transaction processing times and more advanced technical platforms have arrived on the scene, and many believe that an inevitable “flippening” will occur in which another cryptocurrency will dethrone Bitcoin and achieve market dominance. But which one will it be? Before we discuss which potential coin may be next, let’s review the innovation and limitations surrounding Bitcoin.
Bitcoin’s Growing Pains
Bitcoin has established its value as a decentralized digital currency used around the world, but the legacy Bitcoin blockchain has limitations, which include high transaction fees and slow processing time. The legacy blockchain is limited to seven transactions per second (as a means of comparison, Visa processes an average of 2,000 transactions per second).
With developers actively improving the processing platforms for a number of other digital currencies, there are plenty of viable candidates that could assume Bitcoin’s spot as the cryptocurrency with the leading market cap. Let’s take a look at a few possibilities.
The most likely candidate to replace Bitcoin as the leading cryptocurrency is Ethereum. Currently in second place for largest market cap, Ethereum, which typically processes transactions in under 20 seconds and is built on smart contract technology, has already demonstrated major influence at the enterprise level. In fact, there are over 1,000 decentralized applications (dApps) built on the Ethereum blockchain. With a strong community called the Ethereum Enterprise Alliance dedicated to learning more about the cryptocurrency, Ethereum is distinguishing itself as a remarkable asset in the cryptocurrency space. It’s no wonder why one of Ethereum’s creators spoke out predicting an Ethereum flippening in 2018.
Ripple has grown in popularity due to its strategic partnerships with banks and financial institutions such as MoneyGram, Mercury FX FDT Corporation, and Western Union. Ripple, unlike Bitcoin, can conduct cross border transactions in a matter of seconds. Some people believe that blockchain technology could replace the Society for Worldwide Interbank Financial Telecommunication, (SWIFT), which processes over 15 million transactions per day. Ripple, specifically, could be just the project to do so.
Described by its creator Charlie Lee as the “silver to Bitcoin’s gold”, Litecoin could be much more than that. It has already began to adopt the Lightning Network second-layer solution to help with scaling and is looking to atomic swaps to move cryptocurrency between blockchains seamlessly after completing a successful test last year. Litecoin generally trades in lockstep with Bitcoin, but its willingness to adopt new technological solutions quicker than its counterpart makes it a candidate to be a dominant market force.
Bitcoin Cash is a controversial pick to replace Bitcoin, but it is seen by its adherents as the true vision of Bitcoin’s creator Satoshi Nakamoto. By raising the block size on its blockchain, Bitcoin Cash has been able to complete more transactions per second than Bitcoin, all while keeping fees lower than its counterpart. If it is truly believed that Bitcoin is the only coin to rule them all, it is not out of the question that Bitcoin Cash provides the best route to fulfill that ideology.
Will Bitcoin Adapt?
Amidst increased rumors of the flippening, Bitcoin is working on several ways to adapt its technology and retain market dominance. As the Lightning Network grows in network adoption and the global user base of Bitcoin holds, there is no telling how far its market cap could go. It is too soon to tell if the flippening will come to fruition, but the looming question will certainly continue to keep the market on its toes.
[mk_mini_callout title=”Free Download” button_text=”Get the Ultimate Investor’s Guide to Bitcoin IRAs” button_url=”/resources/investor-guide”][/mk_mini_callout]