Bitcoin’s popularity is waning as alternatives such as Stellar, ZCash or monero climb the cybercriminals’ preferred list. Hackers are switching to other cryptocurrencies that law enforcement may be less familiar with, so chances of detecting crime or money laundering related transactions decrease. ZCash and monero, for example, allegedly bring better encryption and privacy features to the table.
“The two most well-known cryptocurrencies are considered too expensive for most new entrants. Despite being able to purchase a fraction of each, there is a real psychological barrier around owning something in its entirety,” explained for CNBC Dave Chapman, managing director at trading house Octagon Strategy.
At a total value of more than $750 billion, bitcoin covers 36 percent of the cryptocurrency market, leaving plenty of room for others like litecoin, ethereum, ripple, dash and monero to grow in market capitalization. Bitcoin’s market share dropped from last month’s 56 percent, while ethereum’s share has tripled.
“With the Ethereum blockchain reaching 1 million transactions per day, and both Ethereum and other blockchain projects frequently reaching their full transaction capacity, the need for scaling progress is becoming more and more clear and urgent,” announced ethereum founder Vitalik Buter.
As a result, “two experimental subsidy schemes” will be started to “tie into and improve Ethereum’s scalability.”
Even Dogecoin, a new cryptocurrency created as a joke, has grown in popularity, reaching a market cap of over $1 billion in January.
According to Bloomberg, analytic firms are paying more attention to transactions and are improving techniques to detect illicit activity and transactions.
“The altcoins today, in large part, are not trying to be bitcoin competitors,” said Lex Sokolin, global director of fintech strategy at Autonomous Research LLP in London. “They are doing something else entirely — ethereum as a smart-contracts platform, iota as a machine-economy token, ripple for interbank payments, and so on.” Their use “should become increasingly relevant as the novelty of crypto wears off.”