Club5050-Understanding The Concept Of Altcoins

Hi everyone.

After the successful launching of Bitcoin (BTC), it has build its reputation at the top very well before any other cryptocurrency were introduced in to the blockchain system. There have been many other cryptocurrencies that have been introduced into the system after BTC.

All these coins that came after the BTC are referred to as Altcoins. Today my discussion is going to be based on Altcoins, their types, examples and much more about Altcoins.

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The word Altcoin is a combination of two different words, alt which means alternative and coin. These two words comes together to form the word Altcoin which simply means alternative cryptocurrencies launched after Bitcoin.

Simply again you can say Altcoins are crypto assets other than Bitcoin. The most famous Altcoin is Ethereum, that is the name you mention when talking about the broader blockchain system of the asset and Ether (ETH) when referring to the currency itself. Other examples of Altcoins are Cardano, Tether, Polkadot, Stellar, Dogecoin, Uniswap, etc.

The introduction of Bitcoin as the first digital currency creates way for many other crypto assets to follow. Most altcoins are manufactured base on the basic structure of Bitcoin. However, altcoins are peer-to-peer, which requires a process of mining and solving difficult problems which has to do with carrying out web transactions.

There are many types of crypto assets in the crypto market, and out of all these plenty assets Bitcoin covers almost half of the total crypto market cap, following by Ethereum which also covers about quarter of the market and the remaining is occupied by Altcoins.

This indicates that there are literally thousands of different crypto assets being exchanged in the crypto market.

Types Of Altcoins

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There are many types of Altcoins in the systems, some of these are forks, stablecoins, utility token, security token, and many others. All these types of Altcoins varies in definition and function. Again, these Altcoins have different values, some don’t cost much but others cost hundreds of dollars.

Some of these types of Altcoins use consensus mechanism to validate transactions, others too separate themselves from the mother coin (BTC) by adding new capabilities like low price volatility. Now let’s take a look at some of these Altcoin types.

Forks: This is a type of Altcoin that deals with the significant change in a blockchain’s protocol that issues how crypto assets are recorded and traded. Forks usually change the currency slightly, turn it into a new form. An example of fork is Bitcoin cash. It was developed when there was a huge number of Bitcoin holders who intend to develop a different version of Bitcoin that will better suit payments.

Security Token: The security token is a digital contract representing portions of a real asset with value. Due to the fact that records on a blockchain platform can not be erased, security tokens serve as a way to record ownership stake in an asset.

Stablecoins: This type of Altcoin has to do with the pegging of valuable crypto assets to another less volatile asset. Stablecoins are linked with fiat currencies most at times like the U.S. dollar. I think I have made a post concerning stablecoins in this community and you can check it out to understand more about stablecoins using this link Stablecoins.

Advantages And Disadvantages Of Altcoins

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Just like any other thing in this world, there are the good and bad aspects of everything and I will be listing out some of the advantages and disadvantages of Altcoins.

Advantages	Disadvantages
Altcoins have improved more on some aspects of Bitcoin	They don’t have Bitcoin market distribution
They also give higher potential rewards	Same way there is much risk in Altcoins since some of them are scam
Adequate choices of picking an Altcoin, with their respective special functions	Many Altcoins are not found on some exchange platforms which makes it hard to buy them.

Consider Investing In Altcoins

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As an investor or a trader you should try investing or trading in Altcoins because you have chosen to make crypto part of your portfolio. To makes things easy for yourself, do thorough research about Altcoins and get to know them more before investing in them.

Some of the Altcoins are very important projects that can give more than Bitcoin. Because Altcoins are not well known like Bitcoin, they could rise in value if they start investing in them.

Also have in mind that, there are spotted disadvantages of purchasing Altcoins. Because they are many in the system it is very difficult to select the best Altcoin to invest in. They also give a greater risk and some of the unknown Altcoins are scam.

To generalize things, Altcoins are worth giving a trial to since investors and traders are willing to make the best out of the market. Altcoins are the better way to go if you are in search of a less risk investments.

Have in mind that it is not recommended to be taking too much risk in your investments so even if you are to invest in Altcoins, try to invest the money you are willing to lose and they should only take some small portion of your portfolio.

It will be very difficult to tell which of the Altcoins will have a durable value as compared to those enjoying their moments in the spotlight. Although, investing in Altcoins is not that much important for those who are taking a whole market method.

But if you decide to involve yourself into cryptocurrencies and DeFi then you need to educate yourself more about Altcoins, their types and uses.

Thank You All!!