The curious case of Altcoins
Altcoin (Alternative coin) is a digital currency that has been either directly forked from Bitcoin blockchain or at some level based on its original concept. After the success of the first and for now, the most popular cryptocurrency, others shortly followed. Right now, we have a crypto market full of hundreds of various altcoins that were mostly forked from or influenced by Bitcoin. Some of them are similar but most vary in stability, type and most of all, in value.
From online meme to billion dollar crypto market
The most popular and valued altcoins are Ethereum, Litecoin, Bitcoin Cash, Ripple and Dash. But every week crypto world gets bigger with the introduction of new crypto coins. Some cryptocurrencies “died out” before Bitcoin even rose to prominence while others embraced the crypto age and rapidly rose in value.
There is also an interesting example of DogeCoin, which was created partially as a joke in order to spread knowledge about blockchain and cryptocurrencies among netizens (Internet users). Both Bitcoin and DogeCoin served their role in popularizing cryptocurrencies and blockchain in general while other cryptocurrencies were created as possible better alternatives to Bitcoin.
Some wanted to offer something that their predecessor couldn’t or be more suitable for a particular type of user. There are many altcoins like Monero or Zcash that heavily focus on customer privacy, offering even greater encryption and anonymity than other crypto coins. Other altcoins wanted to be simply a better cryptocurrency than Bitcoin by eliminating some of its flaws and problems such as ASIC’s and quite long transaction time and thus we have Ethereum, Dash or Ripple.
As it was mentioned above, the crypto market is continually expanding and crypto developers are competing between each other for their cryptocurrency to dethrone the Bitcoin and claim the title of the ultimate cryptocurrency. After all, even with the recent instability, it is a market worth over a few hundred billion dollars.
You are often mistakenly afraid of something you don’t really know
There is no doubt that one can make a lot of money investing in altcoins, and as we mentioned a few times already, the crypto market is constantly growing, so why are so many people afraid of trading fiat or Bitcoin for other cryptocurrencies?
Many people associate cryptocurrencies only with Bitcoin or do not have sufficient knowledge about other alternative coins and therefore do not invest in them. This is a common problem that is stalling the rapid development of both the blockchain technology and the digital financial revolution in general. Bitcoin may be the original and most well-known, but as even his co-creators point out, it is not the best cryptocurrency.
Furthermore, with constant development of the technology and an increasing number of people involved in the crypto world and blockchain fin-tech, it is obvious that we will see more and more quality cryptocurrencies that will be more suitable for modern market. A good example will be already mentioned Ethereum, invented by Vitalik Buterin which was dubbed as crypto experts and users alike as the “next big cryptocurrency after Bitcoin. It is logical that Bitcoin, which was conceived approximately 10 years ago, needs to be replaced by a new, better alternative.
Why you should invest in altcoins?
When you finally realize that altcoins are the present and the future of the crypto market, you can start making money on them. One of the best tips for a beginning crypto trader is not to focus entirely on the Bitcoin. Most traders usually try to accumulate the highest possible amount of Bitcoin they can get, but it does not necessarily mean profits. Even though it is the original and most valuable crypto coin often referred to as “Digital Gold”, other cryptocurrencies are also quite stable and have nice potential. You can invest some amount of your budget into a few prospective crypto coins and cash them out when they reach good value.
It is worth mentioning that altcoins are more unstable than Bitcoin and are considerably dependant on it. If Bitcoin rapidly increases or drops in value, they usually plummet in value because people want to either trade them for Bitcoin or cash them for fiat money. The best moment to buy altcoins is when Bitcoin value has been stable for some time and we do not predict any major changes in it.
Investing in different altcoins is also a good strategy because you diversify your assets and decrease the possibility of losing them entirely. Furthermore, in an opposite situation when the market is growing, if you have invested only in Bitcoin, there is a good chance that you would earn less in comparison to people that invested in few altcoins. It is like that because altcoins tend to have much higher increase rate and they can get even 50 000 - 80 000 times more valuable than before you bought them, while Bitcoin will increase “only” 10-30 times, during the same period of time.
It may not be this year or even another, but eventually one of the altcoins will overcome Bitcoin in both value and popularity, the only question is: How much of that cryptocurrency you will have at that point?