All You Need to Know about Altcoins
When everything is going digital, currencies will too. In recent times, cryptocurrency has become a hot topic for everyone. Almost everyone has heard about Bitcoin, which is a cryptocurrency. There are cryptocurrencies in the market other than Bitcoin are called Altcoin. Any cryptocurrency other than Bitcoin is known as Altcoin. Therefore, any crypto such as Polkadot, Solana, Cardio, and Uniswap can be called Altcoin. The most popular altcoin is Ethereum.
You can guess it from its name. “Alt” stands for an alternative to Bitcoin. Therefore, it is called Altcoin. If you want to trade in Bitcoin, you must have a safe Bitcoin wallet. Although Bitcoins are attracting all the limelight, Altcoins are getting there fast. Most of the Altcoins are made using the concept of Bitcoin itself. Therefore, you could find many basic similarities of Bitcoin with Altcoins.
Why is Altcoin important?
As per the record, 16,500 types of cryptocurrencies have been created till January 2022. Half of the market is occupied by Bitcoin. The other half is occupied by altcoin whereas, and only Ethereum occupies a quarter part of it.
How it works
Just like bitcoin, Altcoins also operate using the same technology, which is blockchain technology. If you do not know about blockchain, then to put it in simple words, it is a hugely distributed database. The blockchain database is being maintained by thousands of computers all across the world. Once a transaction is made, there is no way to reverse it as it will be broadcast and verified by the blockchain. It will be recorded on the database.
Why do some Altcoins have special features?
There are various altcoin creators who uniquely feature their altcoin to make it stand apart from the crowd or to make it a bit different from bitcoin.
For example, Dogecoin was created in 2013. It was launched as a meme coin. However, it gained huge popularity after it got praise from Elon Musk. Apart from that, there is also Steller. Its operators wanted it to be more energy-efficient along with being faster and cheaper than its competitors
What are some of the popular Altcoins available?
Difference between bitcoin and altcoin
Bitcoin is the first crypto in the world. Therefore, it has created a road map of cryptocurrencies. All the Altcoins generally are built using the same technology. Bitcoin can be called the benchmark in the world of digital currency. Everything else more or less follows it. However, bitcoin and altcoin still have some differences, no matter they use the same blockchain technology.
- 84 millions of Litecoin will ever be produced, which is also an altcoin. On the other hand, there will only be 21 millions of Bitcoin production. Ever.
- The functionality is also a bit different. Litecoin takes only 2.5 minutes, whereas Bitcoin takes 10 minutes in the mining process. Therefore, the payment becomes faster in the case of Altcoins.
- You can find a ton of substitutes to Bitcoin in the world of digital currency. However, it is really hard to reach where Bitcoin is today. It has a market value of USD 1.07 trillion as of now.
What are the Pros and Cons of altcoin?
The pros of Altcoins are:
- Altcoins are created using the same technology as Bitcoin. Moreover, while being created, the main focus was on its improvements. Therefore, it comes with more facilities.
- The other most prominent advantage of altcoin is, it does not cost as much fee as Bitcoin. Therefore, it provides cheaper transactions.
- Some of the Altcoins are even created to be faster as well. Therefore, transactions can be made in less amount time.
- The competitors get much scope to compete as the mining method is quite similar.
- To mine Bitcoin, you only need common hardware; whereas, you would need expensive hardware systems in the process of bitcoin mining.
The Cons of Altcoins:
- The altcoin market is new. Therefore, it is highly volatile.
- There are similar chances of altcoin becoming prey to many scammers.
Altcoins are an alternative to bitcoin and doing really well. Although, you should always ask some questions and have your concepts clear before investing in the crypto market.