Bitcoin is one of the most exciting and globally impactful new technologies to hit the planet since the invention of the internet. With that being said it is important to understand the benefits and limitations of Bitcoin, and which other cryptocurrencies can fill in where Bitcoin falls short.
With that in mind, we’re going to take a look at what Bitcoin’s 21 million limit actually means, investigate ten affordable Bitcoin competitors who offer long term acquisition possibilities, and discuss Bitcoin’s market cap to help you better understand the value of the cryptocurrencies you choose to invest in.
Why Is Bitcoin Limited to 21 Million?
An intriguing aspect of Bitcoin is the fact that when Satoshi Nakamoto designed his visionary decentralised virtual currency, he limited its expansion to 21 million BTC.
More than 18.5 million Bitcoin have been mined in the first decade since the cryptocurrency’s creation, however, it is predicted that mining the last remaining 2.5 million coins (11.9% of total) will take anywhere from fifteen to twenty years to complete.
This is thanks to a process known as The Halving. Nakamoto included a process which effectively cuts the Bitcoin rewards for mining in half every four years. In practical terms, the total BTC reward for 2016 was 12.5 million, however by mid-2020 the same amount of “work on the blockchain” only rewarded miners with 6.25 million BTC.
This may sound like it is a lifetime away however it represents less than two decades of “carefree” mining before the only way to monetise the cryptocurrency will be via transactional fees and direct sales of the BTC you own.
Who Are Bitcoin Competitors?
Considering the real world limitations of Bitcoin here are 10 affordable Bitcoin competitors. For ease of use we have sorted them using the total percentage available for mining (based on CoinMarketCap data for 17 February 2021):
Avalanche (AVAX) - price: $36.38, mining availability: 89%
The Graph (GRT) - price: $2.18, mining availability: 88%
Uniswap (UNI) - price: $21.44, mining availability: 69%
Huobi Token (HT) - price: $14.50, mining availability: 61%
Chainlink (LINK) – price: $32.19, mining availability: 59%
Synthetix (SNX) - price: $24.27, mining availability: 56%
XRP (XRP) – price: $0.53, mining availability: 55%
Stellar (XLM) – price: $0.49, mining availability: 55%
Cardano (ADA) - price: $0.89, mining availability: 31%
Neo (NEO) - price: $42.58, mining availability: 30%
Whether it is due to rising prices or the scarcity created by its 21 million limitation the fact is that Bitcoin will not be able to dominate the market for much longer. This means that the smart money is on diversifying your options by looking into altcoins which could grow into the next Bitcoin.
What Does Bitcoin Market Cap Mean?
When looking at any investment vehicle market cap, or market capitalisation, refers to the number of shares which have been bought and then held by the investors. In the case of Bitcoin, this would then refer to the total value of all BTC currently held by people who have either bought, traded or mined them.
Traditionally calculating the market cap of stock would mean looking at the number of shares held by investors multiplied by the closing value of the stock. The same logic is applied to cryptocurrency market caps, here we look at the number of BTC being held multiplied by the current value of a single coin.
What is the Market Cap Value of Bitcoin?
In January 2021 market and consumer data provider Statista calculated the relative market cap of Bitcoin to be approximately $600 billion. This is an amazing success story when you consider that in 2013 analysts placed the company’s market cap at $1 billion.
The reason for the surge in Bitcoin’s market valuation is based on the number of Bitcoin which have been mined and the recent price surge which saw the virtual coin’s value hit an astounding $49,951 BTC thanks to Tesla’s massive investment in the technology.
For those doing the math on this, it may seem off-kilter given that approximately 18.5 million BTC have been mined to date. However, market analysts consider who much BTC is available for circulation. Given public reports of lost wallets, misplaced passwords and genesis blocks which cannot be traded the number of coins in circulation is far lower than the number of blocks mined.