After the success story of Bitcoin, many other peer-to-peer digital currencies have emerged in an attempt to imitate that success. The word “altcoin” is an abbreviation of “Bitcoin alternative,” and thus describes every single cryptocurrency, except for Bitcoin. Namecoin was the first altcoin created in April 2011. Similar to Bitcoin, there are a variety of ways to obtain altcoins.
- Apart from Bitcoin, there are hundreds of other cryptocurrencies known as “Altcoins”.
- The word “altcoin” is an abbreviation of “alternatives to bitcoin”.
- For example, ether, ripple, litecoin, zcash, monero, and dash.
- Altcoins and Bitcoin differ from each other in a number of ways.
- Most altcoins are like Bitcoin clones, changing only minor characteristics such as its transactions speed, distribution method, or hashing algorithm.
- As compared to Bitcoin, altcoins are riskier.
- Altcoin markets are highly prone to price manipulation.
With increasing popularity, people are getting familiar with Bitcoin. However, once they begin to get involved with cryptocurrency, they might be surprised to learn that there are hundreds of other digital currencies as well. These are known as “altcoins” or alternatives to bitcoin; for example, litecoin, ether, ripple, zcash, monero, and dash. However, what are Altcoins and why do they matter baffles many.
After the success story of Bitcoin, many other peer-to-peer digital currencies have emerged in an attempt to imitate that success. The word “altcoin” is an abbreviation of “Bitcoin alternative,” and thus describes every single cryptocurrency, except for Bitcoin. Namecoin was the first altcoin created in April 2011. Similar to Bitcoin, there are a variety of ways to obtain altcoins. The most basic way to obtain altcoins is to accept them as payment for goods or services. You can also trade for altcoins on cryptocurrency exchanges.
Altcoins and Bitcoin differ from each other in a number of ways. Some Altcoins have a different economic model or a different coin-distribution method, like for an example an altcoin was air dropped to all citizens of a country.
While some employ different proof-of-work mining algorithms, perhaps to resist specialized mining hardware or maybe they don’t even rely on proof of work at all. Several altcoins offer a more versatile programming language to build applications on top of, while yet others offer more privacy compared to Bitcoin. And there are also altcoins that serve very specific, non-monetary use cases, like domain name registry or data storage pointers.
Notably, there are many altcoins that don’t do anything remarkable. They simply twist some parameters that actually don’t matter much, or offer something that may only sound useful but actually isn’t. For example, if an altcoin has a greater total amount of coins, it simply means each individual coin costs less. If an altcoin finds blocks faster, it only means that a transaction requires more confirmations for a similar level of security. This means, most altcoins offer no benefit over Bitcoin at all. Moreover, they have less hash power securing them, involve fewer developers improving them and are usually less useful due to smaller network effects. And while many altcoins promise useful features, upon closer inspection, many of these promises are merely promises.
Cryptocurrency investments carry a great deal of risk. Even Bitcoin exhibits price volatility on a regular basis. However, as compared to Bitcoin, altcoins are riskier as their exchange rates are often more volatile. Over the years most altcoins have come and gone, failing to maintain their value against bitcoin. Altcoin markets are highly prone to price manipulation and they have a low market cap (the total value of all coins combined). Furthermore, many altcoins can be considered absolute scams, mainly created to enhance its inventors and early adopters.
Although some altcoins perform useful tasks, like offering greater anonymity than bitcoin and may have a future, many others are solely driven by speculation. If you do choose to invest in altcoins, it is important to remember some basic tenets of investing. Avoid the hype that coin communities propagate. Take the time to research the coins you are considering for long-term investments, and research day-trading before you attempt to become a high-volume, short-term trader.
List of Top 10 Cryptocurrencies as on 20 August 2017
|S No.||Name||Market Capitalization*||Price (IN US$)||Supply(In Circulation)|
|3||Bitcoin Cash||$13,754,550,239||$833.68||16,498,538 BCH|
|10||Ethereum Classic||$1,295,810,690||$13.68||94,704,312 ETC|
Source = Coinmarketcap.com
*Market Capitalization is calculated by multiplying the price with the supply of coins in circulation.
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