Altcoins are an alternative form of cryptocurrency that was created to compete with Bitcoin. While some altcoins have faded from the spotlight, there are still many that you should consider investing in. Altcoins can be used as a more private way to make payments and save money, but it’s important to understand how they work before making any purchases.
What is an altcoin?
As you might have guessed, “altcoin” is a word that is used to describe any cryptocurrency that is not bitcoin. The term was originally used as a play on words by the creator of litecoin, Charlie Lee, who wanted to be able to distinguish between his new project and the original cryptocurrency. However, most people today use altcoins and bitcoin interchangeably when talking about cryptocurrencies in general.
Altcoins are often referred to as alternative coins or tokens. This mainly refers back to their origins before the term altcoin was coined; these were simply different types of bitcoins with different values!
How do altcoins compete with Bitcoin?
Altcoins compete with Bitcoin in several ways, including:
- Privacy – Altcoins often use a different blockchain technology than Bitcoin. This can result in more privacy for users by providing the ability to transact anonymously or in concealable amounts.
- Flexibility – Many altcoins offer features and functionalities that differ from those of Bitcoin and other cryptocurrencies, potentially making them more useful for certain purposes than their competitors. For example, some have been designed specifically to facilitate payments between businesses or merchants and customers (such as Litecoin), others have been designed to be easily mined using consumer-grade hardware (such as Monero), and yet others still have been created exclusively to serve specific industries (for instance, Ripple).
- Scalability – While both Bitcoin and most altcoins use blockchain technology as their foundation, they differ greatly on how they scale transactions on their networks over time. The two primary scaling solutions implemented thus far include 1) increasing block size caps via hard forks; 2) implementing second layer protocols such as Lightning Network & Sidechains.
How to buy and trade altcoins?
To buy and trade altcoins, you need to have an account with a cryptocurrency exchange. For example, if you want to trade Ethereum for Litecoin or Ripple, you can create an account at LocalBitcoins or Kraken. After registering on the platform and verifying your identity (which typically takes less time than it takes to apply for a loan), you can start trading using one of the following methods:
- Via bank transfer* Via credit card* Via PayPal
Do altcoins have a good future?
Altcoins have a good future. However, that depends on the altcoin and its use case. If you’re looking to diversify your portfolio or make some money, then it might be worth investing in altcoins.
Altcoin examples:
The following is a list of altcoins, or alternative coins, that have been popularized by the cryptocurrency community:
- Litecoin
- Ethereum
- Dash (formerly known as Darkcoin)
- Monero (formerly known as BitMonero)
- Ripple and XRP
Other notable altcoins include Bitcoin Cash (BCH), NEM (XEM), NEO, and EOS. To see the full list of cryptocurrencies visit CoinMarketCap.com.
Altcoins can be used as a more private way to make payments and save money.
You can think of altcoins as a way to make payments and save money. They have their own blockchains, which means they’re not just a token that runs on another cryptocurrency’s blockchain. Altcoins are also not just an e-currency or digital asset.
They’re a decentralized system of value transfers, which means users don’t need to rely on anyone else to keep their money safe. This can be incredibly useful for people who want to invest in different types of altcoins rather than relying on just one coin (like Bitcoin).
In order for you to understand how all this works, we’ll walk through some basic steps:
- Buying your first Altcoin (e.g., Ethereum) from an exchange site like Coinbase or Binance;
- Creating an account with a new wallet service provider like Exodus or MyEtherWallet;
- Mining coins yourself using software such as Genoil Miner;
- Checking out altcoin market caps online at CoinMarketCap.
Altcoins are the wild west of cryptocurrencies and the frontier is just getting started.
In summary, altcoins have been one of the most exciting developments in the cryptocurrency space. These digital currencies are essentially clones of Bitcoin, but they have more features and benefits that make them stand out from their parent coin.
For example, some altcoins allow users to send payments anonymously or with less fees than other coins like Litecoin or Dash would charge you for doing so. However, there are also drawbacks such as an increased risk for scams or hacks because some exchanges don’t verify their customers’ identities before allowing them access to trade these assets.