Disclaimer: The information in this blog represents the opinions of its author and is for educational purposes only. It is not intended as investment advice. Cryptocurrency markets are extremely risky so you should only invest money you are willing to lose.
Down The Rabbit Hole
Once you start investing in cryptocurrency, it's easy to get lost down the rabbit-hole and quickly forget its real-world applications. The average non-investor is really only interested in one thing: can I use it to buy a cup of coffee?
This is not a trivial question - it is at the heart of the discord within the bitcoin community, enough so that merely asking it may give investors heart palpitations.
There's no question that bitcoin has proven to be an astonishingly profitable speculative investment. It's also pulled off the remarkable feat of partially expropriating the role of gold - as a store of value, reserve currency, and safe haven in uncertain economic times or when a country's fiat currency is collapsing.
Falling Short Of Satoshi's Dream
As a borderless global payment system, however bitcoin may be falling short of Satoshi's dream of a peer-to-peer digital cash system. Everyone agrees that bitcoin, with its 1 Mb block size, suffers from serious, even potentially fatal, scaling issues. While it is useful for large transactions, when it comes to the everyday stuff it's expensive, slow, and inefficient. On top of that, the bitcoin community seems to be perpetually entrenched in a kerfuffle over how to best address these issues.
Simple & Quick
As bitcoin inevitably grows, it will have to process way more than 7 transactions per second to become the next Paypal or VISA (which processes 20,000). It will also have to be much cheaper and easier to use. There are several altcoins you can invest in now that were built from the ground up to specifically solve those problems
The Chart Tells The Story
Don't take ours, or anyone's, word for it - just look at the chart. The altcoins that have been ascendant in the wake of bitcoin's recent price decline are the ones the smart investor should be looking at for future dominance in the micro-crypto space. We've summarized the fundamental and technical specifications for each one below.
Built from the ground up for small, high-frequency transactions with fast confirmation times, litecoin has bigger blocks than bitcoin and compared to bitcoin's 10 minute delay (a significant backlog on the bitcoin network may increase the delay to several hours), litecoin is built on a blockchain that processes a block about every 2.5 minutes.
Off The Chain
Litecoin was an early adopter of SegWit, a kind of data compression that relieves strain on the blockchain - speeding up transaction and confirmation times. SegWit will allow litecoin to use the Lightning Network, which facilitates off-chain peer-to-peer transactions governed by smart contracts which are executed through private channels. Keep an eye out for the lightning network - it will make litecoin transactions even quicker and less expensive.
Founded by Charlie Lee, an MIT graduate and former Google engineer, litecoin has 4 times as many coins in circulation than bitcoin (84 million vs. bitcoin's 21 million). It currently holds the #5 spot, with a market cap of $15.3 billion, having increased in price 228% in the past month.
Litecoin summary - 4 times faster, 4 times as many coins, 228% price increase in past month, will get a boost from the lightning network.
Dash (formerly "xcoin", formerly "darkcoin", named "dash" in March, 2015) was designed for ease-of-use and is based on a unique next-generation incentivized P2P network structure that eliminates many of the decentralized governance headaches of bitcoin. It is the first fully self-governing and self-funding blockchain protocol.
Less Than a Second
Dash features Instant send - a feature which allows users to transact instantly (less than 1 second transaction time). This feature also solves the double-spend security risk of other blockchains and gives dash a competitive edge for micro-payments.
One of the most daunting components of crypto-phobia that terrifies many consumers is address confusion. Public and private keys? Wallet PINs and "recovery seeds"? You practically need a PhD in cryptography to understand it all.
Huge Competitive Edge
Enter Dash Evolution - which will essentially put a familiar Paypal-like face on dash transactions (username, password, etc..). Keep an eye out for this development - it will likely give dash a huge competitive edge for everyday transactions.
With a max supply of 7.78 million coins, dash is the #8 crypto with a market cap of $9.2 billion. It's price has risen 85% in the past month.
Dash summary - wayyyyyy faster (less than a second), 1/3 as many coins, 85% price increase in the past month, will get a boost from Dash Evolution.
A hard fork in August gave birth to a nascent cryptocurrency that operated quietly for several months with an 8Mb block size. When phase 2 of the compromise that would have doubled bitcoin's block size went kerflooey, bitcoin cash made its move and tripled in price. It recently got a huge boost with a listing on Coinbase, America's most user-friendly exchange, which catapulted the bitcoin baby to the #3 spot.
With a market cap of $50 billion, it will eventually have the same fixed total number in circulation as bitcoin (21 million). Bitcoin cash recently got a huge boost of full support from the world's largest entry-level exchange. Price has increased 75% in the past month.
First Mocha Latte Wins
BCH may be currently running first in the market-cap micro-crypto marathon, but don't sell the others short - they may be small but they're serious contenders - especially with the implementation of the lightning network and Dash Evolution. Whoever can buy a mocha latte first wins.