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Challenging Practical Features of Bitcoin by the Main Altcoins

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  • Andrew Spurr
  • Marcel Ausloos

Abstract

We study the fundamental differences that separate: Litecoin; Bitcoin Gold; Bitcoin Cash; Ethereum; and Zcash from Bitcoin, and draw analysis to how these features are appreciated by the market, to ultimately make an inference as to how future successful cryptocurrencies may behave. We use Google Trend data, as well as price, volume and market capitalization data sourced from coinmarketcap.com to support this analysis. We find that Litecoin's shorter block times offer benefits in commerce, but drawbacks in the mining process through orphaned blocks. Zcash holds a niche use for anonymous transactions, benefitting areas of the world lacking in economic freedom. Bitcoin Cash suffers from centralization in the mining process, while the greater decentralization of Bitcoin Gold has generally left it to stagnate. Ether's greater functionality offers the greatest threat to Bitcoin's dominance in the market. A coin that incorporates several of these features can be technically better than Bitcoin, but the first-to-marketadvantage of Bitcoin should keep its dominant position in the market.

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  • Andrew Spurr & Marcel Ausloos, 2020. "Challenging Practical Features of Bitcoin by the Main Altcoins," Papers 2101.03891, arXiv.org.
    • Handle: RePEc:arx:papers:2101.03891
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    Cited by:

    1. Yerushalmi, Erez & Paladini, Stefania, 2023. "Blockchain in Financial Intermediation and Beyond: What are the Main Barriers for Widespread Adoption?," CAFE Working Papers 22, Centre for Accountancy, Finance and Economics (CAFE), Birmingham City Business School, Birmingham City University.
    2. Goodell, John W. & Kumar, Satish & Li, Xiao & Pattnaik, Debidutta & Sharma, Anuj, 2022. "Foundations and research clusters in investor attention: Evidence from bibliometric and topic modelling analysis," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 511-529.

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