If you thought that Bitcoin is the only cryptocurrency, you are terribly wrong. There are many other digital currencies and alternatives to Bitcoin – and Altcoin is one of them.
The truth is, Altcoin is not actually a name of a cryptocurrency. Instead, it is a term that describes any cryptocurrency alternative to Bitcoin. For example, Ripple, Etherium or Litecoin are all known as ‘altcoins’ and fall under the category of these alternatives. So, it is safe to say that altcoin is only a term that is used to describe coins with lower market capitalizations.
The hundreds of digital currencies out there are all altcoins as opposed to Bitcoin. In reality, all of these can differ from Bitcoin in a range of ways. While some have an economic model or a different coin distribution methods, others work on different mining algorithms and are linked to specialized mining hardware.
There are even several altcoins that offer a more versatile programming language that builds applications on top of it – and there are others with greater privacy compared to Bitcoin. One way or another, there are many differences between all altcoins.
Are Altcoins Better, More Secure And More Profitable Than Bitcoin?
However, the vast majority of altcoins are actually mimicking the parameters of Bitcoin that don’t matter much or offer something that sounds useful but isn’t. For example, if an altcoin has a greater total amount of coins than Bitcoin, it means that each coin is worth less individually. Or, if any altcoin finds blocks faster and is ‘mined’ in a faster way, it would require more confirmations for a similar level of security.
This is exactly why most altcoins offer no benefit over Bitcoin and have less hash power securing them. They also involve smaller teams of developers maintaining them and improving their features and are usually less useful due to their smaller effects.
That also makes altcoins typically riskier than Bitcoins. However, many people have benefited from them over the years – even though virtually not a single altcoin has maintained its value against bitcoin in the past. Most of them have come and gone and many of them can be considered as outright scams.
Should You Invest In Altcoins?
Knowing how the digital world of crypto currencies is growing and how rapidly the landscape changes, a lot of experts advise people to diversify their crypto portfolios and invest in as many altcoins as possible. The truth is, there are many ups and downs in a market like this – but same goes for Bitcoin which has exhibited some price volatility on a regular basis.
In comparison, however, it is safe to say that altcoins hold a greater risk and are exponentially more volatile. That is mostly because of their low market caps (the total value of all the coins combined) – which makes them prone to price manipulation.
What wealthy traders to is inject large amounts of capital into these low-priced coins and build the hype – therefore causing the price to skyrocket. Once the price increases considerably, the wealthy traders sell their coins on exchanges and get massive profit. This situation is known as ‘pump and dump’ and can hurt many greedy traders who don’t take the time to do their homework.
So, to avoid losing all your money on altcoins thanks to ‘pump and dump’ actions, you should focus on long term investments in coins that have massive potential and ones that exhibit overall health. In a nutshell, these are altcoins that possess strong communities, exhibit high liquidity and have many developers who are proactively improving their source code.
In order to help you see which altcoins have the greatest potential and are considered to be among the safest, we are listing our guide to the best Bitcoin alternatives – below.
A List Of The Most Promising Altcoins (Top Bitcoin Alternatives In The World)
Basically, the most relevant crypto currencies and the altcoins with the greatest potential include:
Litecoin – According to many traders and experts, Litecoin is the second most important digital coin and the first most important altcoin out there. This alternative to Bitcoin had the third-highest market cap as of June 2015. The secret behind its technology is simple – it is quite the same as Bitcoin and costs about 1/50th to 1/100th of what Bitcoin does. Generally, a Litecoin is like a bitcoin except from the fact that its value is closer to what a reasonable person could expect a digital coin to have.
Ethereum – Ethereum is the second most popular altcoin and the third most important coin (for many the second). Even though it doesn’t have the longevity of Litecoin, it is built on a sustainable system on which many other coins are built. For example, most of the ICOs (Initial Coin Offerings) use Ethereum. At the same time, Ethereum has the second highest market cap.
BitcoinCash – This altcoin was created in 2017 when Bitcoin split into two because of its market cap. This resulted in BitcoinCash – a cryptocurrency offering faster transactions and one that is voted on and implemented by the Bitcoin community. Even though it is too early to expect anything from it, it has already gotten a high market cap and could easily shape up and become a top player.
Other significant altcoins to mention include Dogecoin, Namecoin, Darkcoin (Dash), Nxt, Peercoin etc. For more news on each, visit our blog.
Want To Dig Deeper And Find New Potential Altcoins?
If you are interested in digging deeper in the altcoins and seeing how many cryptocurrencies are actualy out there, you can always browse the complete lists on the Internet on websites like coinmarketcap.com and cryptocoincharts.info.
In the end, while most traders have a harder time trading with anything other than Bitcoin, these altcoins have also showed mass popularity and great profits for many out there. As such, they can be easily traded at the most popular online cryptocurrency exchanges.