Beginning traders and investors find it difficult to choose the right cryptocurrencies that can bring financial gains. Besides, new projects emerge regularly. Many newbies don’t even know about the differences between them. However, it’s crucial to realize that cryptocurrencies aren’t all the same. They have their own technical features, purposes, fundamentals, values, price performances, and so on. In order to simplify your choice, we decided to provide you with an objective crypto comparison of the most frequently discussed cryptocurrencies – Solana, Dogecoin, Ethereum, Ripple, and Litecoin.
|Recom- mended for
|Developers of dApps and creators of NFTS
|Businesses that need to process payments
|Developers of dApps, managers in different sectors
|Financial institutions and businesses
|Businesses that need to process payments
|65,000 transactions per second
|33 transactions per second
|30 transactions per second
|1,500 transactions per second
|54 transactions per second
|Ripple Transaction protocol (RTXTP)
|Proof-of- work (Scrypt)
|Average price in 2022
|Expected price in 2023
Why is network protocol so important for cryptocurrencies?
The network protocol is one of the main things about cryptocurrencies. There are many mechanisms applied by the compared projects. Dogecoin, for example, uses the proof-of-work model since it was founded as a parody of Bitcoin. However, over the course of time, the blockchain has greatly evolved. There’s nothing strange that such an extraordinary project attracted the attention of the most extraordinary billionaire in the world. As Elon Musk once said, explaining why he invested in DOGE, “fate loves irony and the most ironic outcome would be for a joke crypto to become the currency of the future.”
Ethereum is completely different than Dogecoin. The idea of this blockchain appeared the same year as Dogecoin but it managed to come true in 2015. What makes Ethereum’s algorithm unique is that its founders introduced the proof-of-stake algorithm. According to Charles Hoskinson, the founder of Cardano, “it’s low cost to experiment with this when you have a proof-of-stake system as opposed to a proof-of-work system where it’s really expensive to change, and you lose all your security when you change one algorithm from one to another”.
Considering this, the investor believes that the future of the crypto market will be related to the proof-of-work system since this model is more flexible and safer. And it really is. We can clearly see how Ethereum manages to implement various innovations, including the integration of such technologies as smart contracts and NFTs. Such resilience makes Ethereum a good store of value for investors who believe that blockchain technology will feature multiple use cases.
In these regards, Solana has a lot in common with Ethereum. It also enables the development of decentralized projects and non-fungible tokens based on the technology of smart contracts. However, unlike Ethereum, Solana doesn’t apply a proof-of-stake model. It relies on an innovative algorithm called proof of history. It enables faster transactions with lower fees. As with any innovation, the proof-of-history mechanism needs improvements but it has great prospects.
Ripple is a unique project because it doesn’t apply any of the mentioned protocols. Created as a payment company, Ripple developed the Ripple Transaction Protocol (RTXTP). In conjunction with blockchain, this technology enabled quick cross-border transactions.
What is the biggest similarity between different cryptocurrencies?
As you see from this DotBig comparison above, all cryptocurrencies have specific features that make them unique. This is what makes the cryptocurrency industry more diversified. Thanks to the diversification, there are a lot of crypto assets to choose from for your DotBig crypto trading strategy.
Despite all the differences, there is one underlying feature that makes all cryptocurrencies similar to some extent. We talk about decentralization. Cryptocurrencies are created using a distributed ledger (blockchain) and peer-to-peer (P2P) review. This makes platforms more secure and resilient against hackers. That is why blockchain is considered one of the safest technology these days, where everything is recorded and validated by huge computing powers.
The bigger the level of decentralization is, the better the cryptocurrency is considered. Deep decentralization proves the reliability of the network. When problems with this aspect occur, the native coin of the network quickly loses a big share of its value as holders start selling their coins to prevent being hacked. Among the list of cryptocurrencies in our DotBig crypto comparison, Ethereum is the most decentralized blockchain.
Are there any risks?
The risks of investing in cryptocurrencies are quite significant. Financial losses are the same big as potential losses. This is because crypto investors have to deal with:
- extreme volatility of the crypto market;
- dependence of coins on hype and reputation;
- potentially unfair projects that attract your investments;
- no regulation by official authorities;
- extreme price fluctuations.
Mitigating all these risks is possible if you devise a wise crypto trading strategy and find a reliable platform to fulfill it. For example, you can consider the DotBig company that enables cryptocurrency trading and puts reliability and safety above all the other priorities.
Although the risks are significant, we suggest that you should try investing in cryptocurrencies. Volatility and extreme price fluctuations can not only be reasons for losses but for profits as well. Besides, reputable cryptos are very secure and are considered the best assets to resist inflation. Benefit from low trading fees and transaction commissions with crypto and the correctly chosen trading platform.