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Cryptocurrencies other than bitcoin are often called altcoins. Most hold little value and are thinly traded. But the best altcoins are structured to improve efficiency, transaction speed or functionality or to provide other specialized advantages over the original bitcoin network.

The cryptocurrency market is volatile. Venturing outside the relative safety of bitcoin can be treacherous. But the top-performing altcoins often outperform bitcoin and generate huge returns for investors during crypto bull markets.

This list of the best altcoins in 2024 excludes meme coins and stablecoins. It includes altcoins that have branched off from the main bitcoin blockchain and wrapped cryptocurrencies.

Market cap: $316 billion

1-year return: 77%

Ethereum was launched in 2015 and was one of the first altcoins to gain popularity among investors. To this day, ethereum is by far the most valuable altcoin, making up nearly 19% of the market cap of the entire global cryptocurrency market. Ethereums functionality differentiates it from bitcoin. Ethereums blockchain was the first to introduce smart contracts, code that runs decentralized applications, or dApps. Ether is the native cryptocurrency of the ethereum network. In 2022, ethereum transitioned from a proof-of-work consensus mechanism to a much less energy-intensive proof-of-stake transaction verification system, making ethereum a greener, more scalable network.

Market cap: $49.9 billion

1-year return: 12%

BNB is a cryptocurrency created and issued by crypto exchange Binance as a utility token built on the ethereum network, but BNB has since transitioned to Binances own blockchain. BNB can be used for a wide range of transactions and other use cases, including to access discounted trading fees on the Binance exchange. BNB is also automatically burned each time a block of transactions is verified to reduce its total supply. Unfortunately, BNB took a hit in 2023 after the U.S. Securities and Exchange Commission sued Binance on June 5 and accused the company of violating securities laws.

Market cap: $49.5 billion

1-year return: 454%

Solana is a blockchain network launched in 2020 that supports dApps, smart contracts and non-fungible tokens, or NFTs. But solanas unique, hybrid proof-of-stake and proof-of-history verification system makes it faster and cheaper than the ethereum network. Perhaps more importantly for investors, these advantages make the solana network more scalable than the ethereum network. Unfortunately, the solana network has been plagued by outages since its launch, undermining its credibility within the crypto world. The solana network was down for nearly 20 hours in February 2023, and its inconsistency could be a roadblock to mainstream adoption.

Market cap: $28.7 billion

1-year return: 41%

Ripple is a global payments network designed to be an alternative to the Society for Worldwide Interbank Financial Telecommunications, or SWIFT. The SWIFT payment network is the system global banks and other financial institutions use to transfer money among themselves. Ripple claims its technology is faster, cheaper and more transparent than the SWIFT system. XRP is the native cryptocurrency designed for the Ripple network. XRP got a huge boost in July when a judge ruled that crypto is not necessarily a security in certain circumstances, potentially putting it outside the SECs jurisdiction.

Market cap: $19.1 billion

1-year return: 52%

Cardano is a decentralized proof-of-stake blockchain launched in 2017 to provide a more efficient system than bitcoin, ethereum and other proof-of-work blockchains available at the time. Ethereum co-founder Charles Hoskinson founded cardano. Like ethereum, cardano is focused on functionality and aims to be the platform of choice for dApp development and verifiable smart contracts. ADA is the primary cryptocurrency used on the cardano network to facilitate transactions and run dApps. Cardano users can also use ADA to earn additional tokens via staking, which helps verify the networks transactions and secure its blockchain.

Market cap: $11.1 billion

1-year return: 94%

Tron was launched in 2017 to use blockchain technology and dApps to decentralize the internet. The network has more than 177 million accounts and hosts the largest circulating supply of stablecoins. The tron network uses a delegated proof-of-stake verification system, and its native cryptocurrency is TRX. TRX was originally an ethereum-based token but transitioned to its own blockchain in 2018. Tron specializes in decentralized entertainment and multimedia apps, allowing content creators to sell directly to consumers. The network is also designed to facilitate blockchain-based gaming and casino gambling.

Market cap: $9.7 billion

1-year return: 21%

The polkadot blockchain was launched in 2020 by ethereum co-founder Gavin Wood. The protocol was created to connect different blockchains that were previously unconnected, allowing value and data to be transferred back and forth easily from blockchains such as ethereum and bitcoin. The polkadot network features unique parachains and user-created blockchains that can be customized while benefiting from the same security measures as the main polkadot chain. Parachains also take much of the processing demand off of the main polkadot chain. Polkadots nominated proof-of-stake consensus model involves nominators financially backing validators as a show of trust in the validators integrity.

Market cap: $7.9 billion

1-year return: -26%

Polygon is a platform launched in 2017 to connect and grow ethereum-compatible blockchains and related projects. Polygon was created to help the ethereum networks scalability problems by handling transactions on a unique, ethereum-compatible blockchain and returning those transactions to the main ethereum blockchain. The polygon network uses a modified proof-of-stake consensus mechanism to verify transactions. Developers can use polygon to build projects on the ethereum blockchain without encountering scalability issues. MATIC is polygons native cryptocurrency used to secure and govern the network. Users receive MATIC as a reward for staking their holdings and helping validate transactions.

Altcoins are any cryptocurrencies that are alternatives to bitcoin, the original cryptocurrency. The most popular and valuable altcoins include ethereum, BNB and XRP. There are thousands of altcoins in the global cryptocurrency market, but most hold little value and have limited liquidity.

Many altcoins are based on the bitcoin blockchain and have the same basic functions as bitcoin. Still, most valuable altcoins differ in at least one meaningful way from bitcoin in their designs and functionality.

There are many different types of altcoins, including payment tokens designed to be used as currency, stablecoins pegged to the value of fiat currencies or other assets, meme coins inspired by a joke and traded for fun and security tokens representing digital versions of real-world assets, and utility tokens used to provide network services.

Also of note: governance tokens provide voting rights or privileges to blockchain users.

The cryptocurrency market is extremely volatile, unpredictable and risky, and altcoins can be particularly susceptible to low market liquidity, limited visibility and regulatory crackdowns. Some are even outright scams.

Other altcoins have performed extremely well as long-term investments, but investors should understand the unique risks of investing in altcoins before putting their money into the market.

Bitcoin and many of the most valuable altcoins have been excellent investments up to this point. But the cryptocurrency market has only been around since bitcoins launch in 2009, so the industry doesnt have the same reliable long-term track record as other asset classes, such as stocks, bonds and commodities.

More here:
10 best altcoins in 2024 - USA TODAY