According to the Investopedia website, altcoins, which stands for “alternative coins,” is a cryptocurrency. They got launched after Bitcoin did well in the market. Here when we say ‘they’ it is with regards to all the alternatives to Bitcoin that are available. Altcoins bring about a competitive advantage, trying to beat Bitcoin in certain areas in the cryptocurrency arena. Currently, there are hundreds of altcoins currencies. Bitcoin laid the foundations that they all follow, meaning that they are mined and involved peer-to-peer transactions and provide a cheaper way to make transactions online.
What makes them different from Bitcoin?
The differences are in the details. The altcoin proof-of-work algorithm, and even how the mining gets done, the coin distribution and economic system varies, but everything is quite similar in other regards. One of the most familiar altcoin to come up after Bitcoin is called Namecoin; it got launched on 18 April 2011 with 21 million coins. What made it different was that it made domains less visible and allowed personal mining with greater anonymity.
Another well-known brand of cryptocurrency is Ethereum, which started in 2015 and is considered the second largest to Bitcoin, Dogecoin, which started in 2013 and Litecoin which came about in 2011. The reason why these altcoins are important is that they expand the boundaries of cryptocurrency in this virtual industry. Some things are problematic with Bitcoin; that is where other players step in to make the changes. For example, if you want an altcoin that is more private or has a faster transaction, then you can get them.
Drawbacks of altcoins
Anyone can open altcoin at any time, and there have been cases where some are no longer in existence even after people made investments in them. What remains to e seen is an altcoin that can outperform Bitcoin. These alternative coins tend to be more volatile and compared to the resources that Bitcoin dedicates to improving; a lot of these cryptocurrencies cannot match up.
That is something all novice crypto users ought to be aware f. If you have come across a whitepaper of a cryptocurrency that is promising to go above and beyond what Bitcoin and other digital currencies have done, then you ought to be wary. If there is indeed anything we can learn from Bitcoin is that it is here to stay and nudging into out of its position will be quite the uphill task, though some try.
Final word
With the awareness of altcoins, then you can go about trading or looking for those that are different from Bitcoin but still have considerable market value. You don’t have to be constricted to Bitcoin should these digital currencies be part of your online investment and trading plan and not, for example, real estate luxury condos for sale Toronto has.
Edel is an Editor with a decade of print and digital media experience – specializing in Science, Technology, Finance, Entertainment, and Advertising. He is also a stock and cryptocurrency investor. When Edel is not editing or analyzing charts, you can find him with his DIY lightbox taking timelapses of plants.