What is an Altcoin? Here’s a Definitive Guide
Cryptocurrency is already a common topic these days. You can even engage your barber or local baker in a small conversation about it. Despite its popularity, though, there are still a lot of misconceptions surrounding it.
For example, some people think that the altcoin is Bitcoin while others believe the altcoin to be a specific cryptocurrency. This article will shed light on what altcoins are, a bit about Bitcoin, and more.
So let’s begin with the common question:
What Is an Altcoin?
The term “altcoin” comes from the words “alternative” and “coin.” It is the umbrella term for any cryptocurrency that is not Bitcoin. In other words, it is not the name of a specific cryptocurrency. There are thousands of altcoins out there, and they vary in price, popularity, and other details.
Bitcoin is the original cryptocurrency and remains the most popular. It is also the catalyst for the birth of blockchain technology. However, Bitcoin has some limitations, which has led to the creation of different blockchains. These blockchains have their own unique features; thus, they need their tokens and cryptocurrencies. And so, altcoins were created.
Different Kinds of Altcoins
As mentioned, there are thousands of altcoins, each of which has been created to solve various problems. For example, some altcoins like Litecoin and Bitcoin Cash are Bitcoin clones. Others are not even considered currencies at all.
For example, Storj powers data storage and cloud computing, IOTA and IoT Chain keep the Internet of Things functioning, and BitShares is used in decentralized trading.
However, different industries utilize altcoins as a solution to real-world issues.
One of them is Factom, an altcoin used to secure and validate digital assets by applying layers of redundant security. These layers make the blocks immutable making it difficult to penetrate.
Aside from Factom, here are some other examples of altcoins with practical uses:
Golem is an altcoin built on the Ethereum blockchain.
Golem is used in many computing tasks, such as machine learning or CGI rendering. Its primary goal, however, is to make supercomputing more available to the public. By doing so, it will eliminate the monopoly of products that have centralized systems and make supercomputing services less expensive.
Siacoin is a cryptocurrency used in the decentralized cloud storage platform, Sia, which is competing against big names like Dropbox and Google. What makes Sia different from the already established significant players?
Unlike the big companies that force users to accept their terms and conditions or risk getting their account deleted, Sia gives users more control through mutual consent. In other words, it cannot do anything to their account without permission, and vice versa.
Sia locally encrypts all the files that are uploaded to their storage system and gives the key only to the owner of the data. Therefore, no one can access the files without the permission from the owner.
This altcoin enables private money transfers that Bitcoin cannot provide. With NavCoin, any transactions are untraceable nor do they reveal the amount of money a wallet holds, even if you’re using a powerful computer. It is also faster and cheaper to transfer money using the NavCoin.
Ripple aims to make the ledger systems of the banking industry more secure. At the moment, thousands of disjointed ledgers spread around the world. Because of this, market makers spend vast amounts of money to make payments. Ripple will be a game changer because it will connect all payment systems in just one ledger, providing banks with their blockchain system.
Investing in Altcoins
Altcoins are a good start for those who are thinking of investing in cryptocurrencies. That’s because the risks are not as high as with Bitcoin or Ethereum.
It’s like investing in penny stocks where you can invest in small amounts in different portfolios.
Here’s a small list to help you get started with cryptocurrency trading:
Note: Altcoin prices and market caps change all the time. At the time of reading, the actual data might be different as displayed below. Always do your research.
5 Most Volatile Altcoins
Tron (TRX): Price – $0.02, Market Cap – $1.35B
Crypto experts predict that Tron will reach the valuation of $1 per coin in five years. Despite these positive predictions, Tron remains to be one of the most volatile altcoins in circulation and has been suffering from a plagiarism scandal. It remains a controversial altcoin and is often associated with a scam.
Ox (ZRX): Price – $0.54, Market Cap – $291.42M
Ox received a boost earlier this year when Coinbase announced that they were considering listing the cryptocurrency on their platform. You can trade ERC20 tokens on the Ethereum blockchain.
Digibyte (DGB): Price – $0.02, Market Cap – $225.06M
What makes Digibyte one of the most desirable cryptos despite its scalability is the level of security it has. According to Coin Report, it has one of the most solid security systems because of its five different algorithms. It is also one of the altcoins that are looking for on-chain solutions rather than off-chain; thus, despite its volatility, many still risk investing in this altcoin.
Populous (PPT): Price – $3.02, Market Cap – $112.63M
This London-based altcoin focuses on invoice financing which combines two kinds of blockchain technology – XBRL data and the Altman Z-score – to assess debts and build an auction platform. Like any other altcoins in this group, it shows great promise, and it might be worth the risk.
Stellar (XLM): Price – $0.24, Market Cap – $4.53B
Stellar is living up to its name as it was hailed as one of the top ten performing altcoins together with Ethereum during the first half of 2018.
Least Volatile Altcoins
Tether (USDT): Price – $0.99, Market Cap – $2.74B
At the moment Tether is more stable than Bitcoin, as it serves as a major bridge between fiat and digital currencies. Tether converts cash into digital currencies and is backed 1:1 by traditional currencies.
Ethereum (ETH): Price – $226.64, Market Cap – $23.4B
The latest report on Ethereum revealed that its price broke a key resistance around $210 against the US dollar with an hourly resistance above the 60 level.
Dash (DASH): Price – $208.76, Market Cap: $1.73B
According to crypto experts, Dash is in a league of its own as it continues to position itself as the cryptocurrency analog for electronic cash. It is even faster than Bitcoin in the block mining chain, clocking at 2.5 minutes while Bitcoin clocks at 10 minutes.
Binance Coin (BNB): Price – $10.24, Market Cap – $977.71M
The Binance coin is the main cryptocurrency used in the Binance Exchange. It offers big discounts when you pay fees with Binance.
The Best Altcoin to Invest in 2018
Now that you are aware of the top altcoins in the market, you might be thinking about which of them are the best crypto to investments. We encourage that you continue doing in-depth research and when you decide to invest, try to create a diverse portfolio.
At the time of writing this article, the total value of the cryptocurrency market is at $225.11 billion. Although there are volatile and stable altcoins, each of them holds a lot of promise as the blockchain technology continues to develop and expand.
Disclaimer: Monetha is not a financial adviser. The information and the links provided above are for general information only. You should seek professional investment or financial advice before making any decisions.