What are Altcoins?
The Altcoin is a portmanteau of the words’ alternative’ and ‘coin.’ Bitcoin, the original cryptocurrency, should prove profitable in the long run. But alternative cryptocurrencies have been introduced. They are built on blockchain technology – a digital ledger of transactions that have increased efficiency and security for exchanging almost anything with anyone everywhere in seconds!
“Bitcoin is like anything else: it’s worth what people are willing to pay for it.”
Stanley Druckenmiller – Referred from brainyquote.com
How is Altcoin different from Bitcoin?
Altcoins could be regarded as Bitcoin‘s equivalent. They share characteristics with Bitcoin but also other differences such as methods of analysis or block time intervals.
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For example, some altcoins use a different consensus mechanism to produce blocks or validate transactions. Also, they differ from Bitcoin as they offer new capabilities such as smart contracts and low price volatility.
List of Important Altcoins Out There
Stellar Lumens
Stellar Lumens was founded in 2014 by Joyce Kim and Jed McCaleb. Its mission is to make transactions smoother, quicker, and more secure across borders. By having XLM act as a bridge between fiat currencies and other cryptocurrencies, transactions can be settled more quickly than with any existing cross-border payment networks, which often carry high fees anyway.
Ethereum
Ether is a sort of cryptocurrency that is used on a blockchain platform called Ethereum. In comparison to other cryptocurrencies, Ether can be considered one of the most prominent altcoins within the system.
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Polkadot
With Polkadot, you can connect your existing projects and bring them directly to the market. Designed as part of a broader goal to return control over internet monopolies, Polkadot runs on an advanced and robust blockchain that offers several advantages compared to networks such as those created by Ethereum.
Cardano
Cardano is a proof-of-stake coin, the first of its kind: peer-reviewed and created with empirical proofs. It merges the industry’s most advanced innovations to deliver the extensive network and protocols necessary for mainstream adoption.
Overall Hype of Altcoins
Cryptocurrencies have led to a fundamental shift in the world’s perspective on money, profits, investment, and trading. The hype has continued to evolve in its own space since Bitcoin mining began in 2009. Although Bitcoin is the center of attention among cryptocurrencies, thousands of altcoins have already emerged.
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The hype cycle is a much-respected study performed by the Gartner Group, which tracks emerging technologies worldwide. It helps companies understand precisely how their industry perceives these technologies, the potential impacts that may affect them, and when they can expect any technology to hit mainstream adoption.
The Risk Factor
- Market access risk is based on how many digital coins are available for purchase.
- It is essential to focus on the code when looking for suitable crypto investments. When creating their own, developers can copy and paste digital coins, including dogecoins that are copies of other cryptocurrencies’ source code.
- Reputation risk is the danger of not being in good standing among the community. One must make sure to determine the credentials of the project’s founders before investing in it.
Wrapping Up
With the rise of cryptocurrency, it is no wonder that many people are interested in investing in the new digital currency. While Bitcoin was the first coin introduced to the cryptocurrency world, people can invest in many other coins. Altcoins are different than Bitcoins in their mining process, hash algorithms, and total supply.
References
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