As the Bitcoin trend is emerging, I’m pretty much sure that you must have heard about Cryptocurrencies and Altcoins. You might have heard in the news or through some websites or you just explored it by yourself. Maybe you don’t know where to start with or how to use it.
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No worries!! Here is the detailed step by step guide, specifically for you. As you will get everything right from the initial setup to buying your first coins.
Let’s get started…
In this article, we will cover all these topics and provide you the complete guide to the altcoin, Let us look into this review in detail now,
What are Altcoins?
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Altcoin, or an alternative digital asset, is a term used to describe cryptocurrencies other than Bitcoin. BTC is often viewed as the original cryptocurrency, while other digital assets provide alternative solutions to crypto users.
Altcoins are similar to Bitcoin. They are cryptocurrencies that use a technology called blockchain that allows secure peer-to-peer transactions. Altcoins build on the success of Bitcoin by slightly changing the rules to appeal to different users.
According to CoinMarketCap, there are nearly 5,400 cryptocurrencies on the market, and none of them have managed to take over Bitcoin’s leading position since the inception of the digital asset industry.
The Brief History of Altcoins
The history of Bitcoin started in 2009 when the mysterious Satoshi Nakamoto created the world’s first cryptocurrency. The year 2011 marks the birth of altcoins when Namecoin (NMC) emerged as the first cryptocurrency ever created after Bitcoin.
While Namecoin was the first digital asset after Bitcoin, its position as the second-largest cryptocurrency was soon taken by other altcoins. One of them is Litecoin (LTC), a cryptocurrency that is very similar to Bitcoin.
In August 2013, Ripple (XRP) joined the ranks of cryptocurrencies. Then one of the important events in the history of altcoins was the birth of Ethereum in July 2015. Since then, thousands of new altcoins have appeared in the market, providing the crypto industry with new use-cases and innovative solutions.
What are the Different Types of Altcoins?
There are four different types of Altcoins which can be broadly described as follows:
1) Major Altcoins: This category includes those altcoins that have managed to carve out large shares of the crypto market. Major altcoins often feature higher liquidity, lower volatility, as well as big communities of active users, and an already established infrastructure. Examples: Ethereum (ETH), Ripple (XRP), Bitcoin Cash (BCH).
2) Stablecoins: Many crypto projects have introduced their stable coin solutions, a cryptocurrency that has its value pegged to one or a basket of assets. The most common stablecoins are pegged to major fiat currencies like the USD or the EUR. Examples: Tether (USDT), DAI, Digix Gold (DGX).
3) NFT Tokens: Non-fungible tokens are used to generate verifiable digital scarcity, as well as digital ownership. It also brings the possibility of asset interoperability across multiple platforms, In many unique applications, NFTs are used that include distinctive digital objects such as crypto-art, crypto-collectibles and crypto-gaming.
3) Utility Tokens and Coins: Most altcoins are categorized as utility tokens. These digital assets grant specific rights to their users. When a business generates a utility token, it means that it effectively creates a type of a digital voucher that can be exchanged in the future. Unlike security tokens, utility tokens are not used as assets and if they are correctly set up, they may be exempted from the federal laws regulating securities. Utility tokens are often Ethereum-based altcoins that have been often issued with the ERC-20 standard during ICOs or IEOs. Examples: Status (SNT), Augur (REP), ASK.
4) Security Tokens: Security tokens are digital assets which derive their value from a tradable external asset. These are subject Federal laws that govern security. The security tokens are compulsory to comply with these regulations. Failure to comply will have significant implications, such as sanctions and the possible systemic failure of the project’s progress. Examples: Blockchain Capital (BCAP), 22x Fund (22X)
Altcoins Pros and Cons
Pros
- Higher potential for greater ROI
- They have low transaction fees
- Legitimate altcoin projects add new value and functions to cryptocurrencies
- Many altcoins utilize more efficient consensus algorithms than Bitcoin
- Some altcoins feature highly scalable blockchains.
Cons
- Increased risks of volatility
- High potential for scams and fraud
- Altcoins with small market caps and limited liquidity face increased risks of market manipulation
Notable Altcoins
1) Monero: It is generally…
Read More: A Detailed Guide On What is Altcoin, Trading Altcoins & List of Altcoins