Right now the top 21 altcoins on CoinMarketCap are:
- Ethereum (ETH)
- Ripple (XRP)
- Tether (USDT)
- Bitcoin Cash (BCH)
- Litecoin (LTC)
- Binance Coin (BNB)
- Bitcoin SV (BSV)
- Stellar (XLM)
- Tron (TRX)
- Cardano (ADA)
- Monero (XMR)
- Tezos (XTZ)
- Chainlink (LINK)
- Cosmsos (ATOM)
- Huobi Token (HT)
- IOTA (MIOTA)
- Maker (MKR)
The question is which of these altcoins will survive the test of time? To get an idea of what it takes for an altcoin to survive long term, it is important to look at the history of the altcoin market.
In February 2014 the altcoin market was just beginning to proliferate and diversify, with less than 100 altcoins on CoinMarketCap. Back then the list of the top 21 altcoins was almost entirely different than it is today, with Litecoin (LTC), Ripple (XRP), Peercoin (PPC), NXT, Omni, Dogecoin (DOGE), Namecoin (NMC), Quark (QRK), Bitshares (PTS), Megacoin (MEC), Worldcoin (WDC), Primecoin (XPM), Infinitecoin (IFC), Feathercoin (FTC), Novacoin (NVC), Tickets (TIX), Digitalcoin (DGC), Devcoin (DVC), Zetacoin (ZET), NetCoin (NET), and AnonCoin (ANC).
The only altcoins which were in the top 21 back in February 2014 that remain in the top 21 today are Litecoin (LTC) and Ripple (XRP). The common denominator between Litecoin (LTC) and Ripple (XRP) is they both are fundamentally unique and useful for something that is economically important in the crypto space.
Litecoin (LTC) is the first scrypt cryptocurrency, which is a variation of the proof of work (PoW) algorithm, and was initially useful among miners with GPUs who could no longer mine Bitcoin (BTC) profitably. Basically, miners could use their computers and GPU farms to profitably mine Litecoin (LTC), so a large community of miners developed around Litecoin (LTC). Scrypt mining continues to this day, except now miners use ASICs to mine Scrypt, but the concept is the same and there continues to be a large community of miners around Litecoin (LTC).
Ripple (XRP) has a unique distributed ledger system that facilitates instant conversion of fiat currencies during cross-border payments. This potential was known since the early days of Ripple (XRP), and this potential is becoming realized as dozens of banks and even Moneygram have begun to use the Ripple (XRP) network.
Dogecoin (DOGE) could perhaps still be considered a significant altcoin, but aside from having an active and well-known community, it has no unique technology and has been slowly sliding down the ranks over the years.
By February 2015 the list of 21 altcoins became slightly more recognizable to the modern-day list, with Ripple (XRP), Litecoin (LTC), BitShares (BTS), PayCoin (XPY), Stellar (XLM), Dogecoin (DOGE), MaidSafeCoin (MAID), NXT, Dash, Peercoin (PPC), Namecoin (NMC), Counterparty (XCP), NuShares (NSR), Banx, YbCoin, (YBC), NuBits (USNBT), SuperNet (UNITY), Monero (XMR), Bytecoin (BCN), and GetGems (GMZ).
Aside from Litecoin (LTC) and Ripple (XRP), the only cryptos which remain in the top 21 today are Stellar (XLM), Dash, and Monero (XMR).
Stellar (XLM) is actually very similar to Ripple (XRP) and is mostly useful its ability for its instant and practically zero-fee transactions which can be used to convert fiat currencies across borders. Perhaps there is simply room for two cryptocurrencies in the cross-border payments sector, and that is why Stellar (XLM) is still in the top 21 today. However, Stellar (XLM) is far less valuable than Ripple (XRP), and its lack of originality versus Ripple (XRP) brings into question whether it will survive long term.
Monero (XMR) on the other hand is highly original, and the king of privacy coins, giving users full anonymity by obscuring the origin, destination, and amount of a transaction. Anonymity will always be in demand in the crypto space, and Monero (XMR) will likely be top-ranking long term.
Dash (DASH) also is a privacy coin but uses a different mechanism to achieve privacy called masternodes, which mix a transaction through many addresses to obscure its origin and destination. Also, masternodes pay operators money, so a community of masternode operators has developed around Dash, which should help sustain it into the long term.
Based on the history of altcoins, it seems that Ethereum (ETH), Ripple (XRP), Litecoin (LTC), EOS, Monero (XMR), IOTA (MIOTA), Maker (MKR), and Dash (DASH) have the highest chance of remaining in the top 21 long term.
Ethereum (ETH) is the top platform for dApp and smart contract development, Ripple (XRP) is the top cross-border payments crypto, Litecoin (LTC) is the top scrypt cryptocurrency, EOS is the top distributed proof of stake (dPoS) and decentralized governance cryptocurrency, Monero (XMR) is the top privacy coin, IOTA (MIOTA) is the top internet of things (IoT) and directed acyclic graph (DAG) crypto, Maker (MKR) is the top decentralized finance (DeFi) platform for lending and borrowing, and Dash (DASH) is the top masternode crypto.
Now for the coins that did not make the cut and the reasons why. Tether (USDT) is the top stablecoin, but it is legally embattled and may not survive long term. That being said, there will likely be a stablecoin among the top 21 altcoins long term.
Bitcoin Cash (BCH) and Bitcoin SV (BSV) are copycats of Bitcoin (BTC) and therefore likely will not survive long term, since they have no unique technology. Likewise, Stellar (XLM) is a copycat of Ripple (XRP) and slowly moving down the ranks long term. Also, Tron (TRX), NEO, and Cardano (ADA) are all trying to compete with Ethereum (ETH) in the dApps and smart contracts sector, which may prove to be a losing battle.
Exchange tokens like Binance Coin (BNB), LEO, and Huobi Token (HT) do not have solid prospects of surviving long term since they are entirely dependent on the fate of their respective exchanges. A lot can happen to an exchange over the course of years, such as hacks and crippling regulation.
Tezos (XTZ) is the top Proof of Stake (PoS) crypto, but long term PoS cryptocurrencies have had a tendency of dying out over time. It is perhaps possible that Tezos (XTZ) will survive long term, but other major PoS coins in the past have steadily slid down the ranks.
Chainlink (LINK) is competing with Ethereum (ETH) in the smart contracts sector and highly centralized, so its long term prospects do not appear to be good.
Cosmos (ATOM) perhaps has a chance of surviving long term, since it is the top crypto based on blockchain interoperability. However, Cosmos (ATOM) is relatively new, and it remains to be seen if blockchain interoperability is something the crypto space in general really needs.
Thus, a review of the history of the altcoin market reveals what characteristics a cryptocurrency needs to survive long term. These include being fundamentally unique and useful for something that is economically important in the crypto space. Conversely, if a cryptocurrency is a copycat or not useful for something that is economically important, then that altcoin will probably drop down the ranks over the years. Another positive factor is decentralization since, if a crypto is centralized, it could get attacked by regulators, or destroy itself via internal turmoil, at some point in the future.
These principles can be applied to any of the thousands of altcoins to determine if they have good prospects of surviving long term, not just the top 21.
In summary, based on a review of the altcoin market’s history, it appears that Ethereum (ETH), Ripple (XRP), Litecoin (LTC), EOS, Monero (XMR), IOTA (MIOTA), Maker (MKR), and Dash (DASH) are the most original and fundamentally useful cryptocurrencies, and therefore have the best prospects for remaining in the top 21 in the coming years.