What are altcoins?
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All cryptocurrencies other than Bitcoin are referred to as altcoins - alternative coins. They got their name from the fact that they are Bitcoins and regular fiat money’s alternatives. The first altcoins were introduced in 2011, and there are currently hundreds of them. Early cryptocurrencies tried to improve elements of Bitcoin like transaction speed and energy efficiency. Newer cryptocurrencies serve a range of uses, depending on the developers' objectives. Because altcoins make up such a large portion of the market, every crypto investor should be familiar with their operation.
The most popular altcoins are:
- Namecoin is the first prominent cryptocurrency, having been released in April 2011. Because it is based on Bitcoin's technology and has a maximum quantity of 21 million coins, it is comparable to Bitcoin. Namecoin is most known for introducing “.bit” web domains, which provide anonymity and censorship resistance.
- Ethereum was the first cryptocurrency to offer a programmable blockchain for developers to utilize when it was released in July 2015. It swiftly overtook Bitcoin as the second-largest cryptocurrency.
- USD Coin is a stablecoin tied to the US dollar that was launched in September 2018.
- All the other coins, such as Ripple, Cardano, Dogecoin, …
Differences between altcoins and Bitcoin:
- Bitcoin is a more established currency. It was founded in 2009, but the first altcoins were issued in 2011, and new altcoins are published on a regular basis.
- Altcoins, except for stablecoins, have a higher risk and reward profile as a cryptocurrency investment. Despite its volatility, Bitcoin is the market leader and has already grown in value significantly. Altcoins have more potential for growth, but they also have a greater risk of failure.
- Altcoins are more sophisticated. They've improved on Bitcoin's technology since their release. Many cryptocurrencies outperform Bitcoin in terms of transaction speeds and costs.
If you're going to make crypto a part of your portfolio and have the time to investigate it, you should consider investing in altcoins. Some altcoins are ambitious initiatives that go beyond Bitcoin's primary use case of being a store of wealth. Because cryptocurrencies are less known, they may see bigger price rises if they take off. Purchasing cryptocurrencies has several drawbacks. It's difficult to identify the finest cryptocurrencies to invest in because there are so many of them.
