Diving Deep into Crypto: Altcoins

Altcoin

An amalgam of two words “alternative” and “coin”, altcoins are all other types of crypto coins except for Bitcoin. The reason for calling them altcoins is that Bitcoin has supreme reign over all of them. It has the highest value and most people will buy them without a second thought, though its value has been decreasing since last year.

There are about 19,000 altcoins in the crypto market and more are released after short intervals. Some alternative coins operate on various consensus systems to authorize transactions and seed in new blocks or make themselves unique from Ethereum and Bitcoin by giving their users advanced technology or capability. Some designers who make new altcoins have the vision of using that crypto or token in some other format that is different from trading.

How Does It Work?

Altcoins use the same system as Bitcoin, that is they function through blockchain technology. But, they are only accessible in the blockchain network they are specifically designed to work for. Many altcoins are “forks” from Bitcoin.

A fork is a phenomenon that happens when the software of different miners becomes unsynchronized. If this issue cannot be resolved, the blockchain splits up into two separate portions. They will share all of their histories before their split. After that, they are individually recognized and perform operations in their own way. The currency’s price might fluctuate due to this split and end up impacting the change in market trends.

You can mine altcoins using the same methods as Bitcoin. If you’re seeking a cost-effective choice, you can always go for an online broker. It only requires a minimum investment amount and your information to fill up a form and create an account. From there on, the app’s latest AI tech will take care of your trading. If you are more eager to discover online brokers, click here to enlighten yourself with the bitcoin champions.

Categorizing Altcoins

By now you know what altcoins are and where they stem from. Let’s discover a few altcoins and their values:

  • Ethereum (ETH): Market Cap – $192 Billion
  • Chainlink (LINK): Market Cap – $4.418 Billion
  • Stellar Lumens (XLM): Market Cap – $2.834 Billion
  • Polygon (MATIC): Market Cap – $7.3 Billion
  • Solana (SOL): Market Cap – $12 Billion
  • Binance (BNB): Market Cap – $46 Billion
  • DogeCoin (DOGE): Market Cap – $18 Billion
  • Ripple (XRP): Market Cap – $21.73 Billion
  • PolkaDot (DOT): Market Cap – $7.40 Billion
  • FTX Token (FTT): Market Cap – $2.995 Billion

Pros & Cons of Altcoin

As their popularity is rising, there are some things that make altcoins superior to Bitcoin and there are some areas in which Bitcoin still has an upper hand. We have distinguished it further in the list below.

Pros of Altcoin

  • Altcoins are the better and improved version of their predecessor because they contain new technological advancements that make them unique from others.
  • Altcoins have a better chance of survival as they use other than just formal trading like the ether of Ethereum.
  • You will have a wide variety of altcoins and different values to choose from.

Cons of Altcoins

  • They are not very popular as Bitcoin as it already has command of over 40% of the cryptocurrency world.
  • Investors often hold back from investing in it as altcoin’s price is almost nothing when compared with Bitcoin.
  • As there are few investors, they are not sold at high prices which is another reason why people don’t prefer investing in them.

Final Verdict

We cannot say that altcoins are better than Bitcoins but there are some aspects that make them worthy of investing in. They are less volatile and some of them are making good progress such as Ethereum, Dogecoin, and Shiba Inu, among many others. 

Having just a single investment option is always a bad idea because you won’t have more options to sell as all of your investments are dependent upon one source. A small investment at 2-3 places can make you better money and show enhanced recovery from loss. So, altcoins can be considered a good investment option but always do a background check before making an investment.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.