Bitcoin has spawned a whole market of alternative cryptocurrencies. Today, there are more than 5,000 of these “altcoins”.
Altcoins can be a good way to diversify your crypto holdings, especially given the additional features they offer.
Cryptocurrency trading is unregulated in the UK. You will not receive any compensation if something goes wrong. Your capital is at risk, which means you could lose some or all of your investment.
1. Ether (ETH)
Ether is the native token of Ethereum and the second largest cryptocurrency in the world. Ethereum is a global software platform that runs decentralized applications, smart contracts, and financial transactions, as well as the creation and storage of non-fungible tokens (NFTs).
Launched in 2015, ETH has amassed a market capitalization of over £144 billion as of July 26, 2022. The crypto’s value peaked at £3,815 in August 2021, and each token is now worth £1,165
2. Bitcoin Cash (BCH)
Bitcoin Cash was the result of a hard fork in the original bitcoin project in 2017. A splinter group of contributors wanted to increase the block size in Bitcoin’s blockchain to accommodate more transactions.
Bitcoin Cash has the same proof-of-work consensus mechanism and the same hard cap of 21 million coins as Bitcoin. As of July 26, 2022, one Bitcoin Cash token was worth £95.51.
3. Litecoin (LTC)
Litecoin was an early challenger to Bitcoin when it was launched in 2011.
Litecoin uses a proof-of-work consensus mechanism like bitcoin, which means new coins are minted to reward miners for processing transactions on its blockchain. However, Litecoin’s new Scrypt algorithm makes transactions faster than Bitcoin.
Litecoin peaked at £326 in May 2021. As of July 26, 2022, one LTC was worth around £44.
4. Solana (SOL)
Like Ethereum, the Solana blockchain was designed to host decentralized applications (dApps). A relative newcomer, Solana and its SOL cryptocurrency launched in 2020.
Solana’s low transaction fees are much cheaper than those of its competitors. The Solana blockchain can process up to 65,000 transactions per second through a “proof of history” process.
A timestamp affixed to each block creates a permanent record of the transactions in the order they were made. As of July 26, 2022, SOL was worth £29.53.
4. Gimbal (ADA)
Created by an Ethereum co-founder in 2017, ADA is the native cryptocurrency of the Cardano blockchain. Cardano uses a proof-of-stake consensus mechanism to verify transactions rather than proof-of-work.
It requires much less power than its proof-of-work counterparts, as network users stake their own tokens for the chance to become a validator rather than using power-hungry machines to crack the cryptography used in proof-of-work systems.
On July 26, 2022, a Cardano was worth 38p – down from a peak of £2.45 in September 2021.
5. Dogecoin (DOGE)
What started as a parody of cryptocurrencies soon became the biggest memecoin in the world.
DOGE hit exchanges in 2013 and used distributed ledger technology derived from Litecoin.
The memecoin peaked in value in May 2021, reaching 46p. Much of DOGE’s positive price movements have followed support from Tesla founder and entrepreneur Elon Musk. In July 2022, however, DOGE’s value fell to around 5p.