There are five possible use cases for crypto that I see.
1. A black market currency
2. A low-fee, decentralized international payment system
3. An investment
4. A general-purpose currency
5. A secure, trustless information ledger
As A Black Market Currency
For use in the black market, we're going to want a way to hold the currency anonymously, and a way to send private transactions.
- BTC wallet anonymity is possible with a few hoop jumps, but private transactions are impossible. If address X has a transaction with a known black market address, this is public knowledge, and address X is forever associated with this shady exchange.
- XRP has the same problems as BTC, with the added risk of validators simply rejecting transactions with known shady addresses.
- ETH is currently no better than BTC, but they plan to implement technology borrowed from ZCash to allow private transactions, so ETH will be more private in the future.
Best alternatives right now for this use case: Monero, ZCash
As An International Money Transfer System
For this, any low-fee system will work. The lower the fees, the better. Right now this means everything but BTC, but what would the fees look like in the future, assuming widespread adoption?
- BTC "on-chain" transactions will only get worse, but they are working to implement Lightning Network. This will end up sort of like a "real" BTC wallet that you treat like a savings account, and a Lightning BTC wallet that you treat like a checking account that has low fees and fast transactions. The catch is that you have to pay the on-chain tx fee to transfer from your BTC wallet to your Lightning wallet.
- Same story for ETH, really. Widespread adoption of ETH will result in high transaction fees. Not as high as BTC, but high. Ethereum is working on several scaling strategies in parallel, but realistically they're a year or two away.
- XRP was built for this use case. It will scale, be low fee, and in the future, it may even be possible to use it through your bank. It's not super decentralized, but it's fast and low fee.
As An Investment
At this point I have no idea. I don't understand why the market caps on these coins are so high. Let's be honest, they don't do anything cool yet. As a general rule I'd say don't put in anything you can't afford to lose 100% of.
In the long term, I think any cryptocurrency that has a capped supply and a plan for scaling is a decent choice. I personally like the smart contract ones: Ethereum, Zilliqa, Eos, Cardano, RChain. Raiblocks is cool too. There are also some interesting ERC20 tokens. But those are all just opinions.
As A General Purpose Currency
For this use, we want widespread adoption, stable value, low transaction fees, and transaction verifiability. For this space, my favorite is USD.
Seriously though, a deflationary general purpose currency makes a bad currency, and so does a volatile one. Imagine buying something on credit and owing waaay more than you thought you would, or buying something when you could have bought two of it a month later. Deflation and volatility decrease the money velocity of a given cryptocurrency to the point that any economy based on it is much smaller that it would be otherwise. It makes the currency hard to spend and discourages its use. We already see the effects of this: Very very few businesses accept BTC directly because its value is so unstable. And it's a vicious cycle; less businesses accept it, so its utility is less, so less businesses accept it.
In the long term, I think something like Dai or OmiseGO has a chance of being useful. But it's not ready yet.
As A Secure, Trustless Information Ledger
This is the space that I think has been explored the least, and which I think has the post potential. It could disrupt a lot of industries, including certificate authorities, DNS, and, maybe someday, thinks like deeds, titles, stock ownership, and land registries. But all of this is years off.
- BTC and XRP cannot be used well for this purpose.
- ETH was built for this use case. Maybe in a few decades we'll see corruption in some countries being combated by registering things in an Ethereum or Ethereum-style blockchain.