2021-04-06 | CryptoCurrency.org
Cryptocurrency has become a hot button topic in trading and investment circles. While Bitcoins tend to occupy the limelight, there are multiple other coins or cryptocurrencies that are attracting eyes, too.
What are altcoins? The essentials
Altcoin is a combination of the words "alt" and "coin" and includes all alternatives to Bitcoin. The success of Bitcoin as the first peer-to-peer digital currency paved the way; however, many altcoins are trying to target the perceived limitations of Bitcoin. In order to succeed against Bitcoin an altcoin must have a competitive advantage over its ancestor.
Many of the altcoins have been built upon the basic framework provided by Bitcoin, therefore, most altcoins are peer-to-peer. They try to offer efficient and inexpensive ways to carry out transactions on the Internet. Altcoins vary widely from each other, even though most of them share many overlapping features.
Types of Altcoins
As soon as altcoins started to evolve, distinct categories began to emerge as well. Here are the main types you should be aware of:
Are altcoins just another form of Bitcoins?
Although there are some similarities between the different kinds of altcoins (see above) and Bitcoin, the answer is a definitive no. Altcoins don't all follow the same rules as Bitcoin and they are, by definities, an alternate to Bitcoin cryptocurrency. One example of this is Litecoin - Bitcoin will only ever mine / produce bitcoins in every 10 minutes, Litecoin will produce coins every 2.5 minutres making its payments proceses faster.
There is a sharp difference in the quantity as well: Litecoin will produce 84 million litecoins, while Bitcoin will only produce 21 million bitcoins. Additionally, bitcoins require costly hardware to mine, litecoins can be mined with common computer hardware.
Examples of altcoins
Here is a short list of altcoins and some information on how they position themselves with some additional message board reading - this is, of course, by no means an exhaustive list.
The future of altcoins - conclusion
The future of altcoins is indeed promising, as many new altcoins saturate the market and pose their own challenge to the reign of Bitcoin. Altcoins are perfect for investors looking to diversify within the cryptocurrency space in order to boost portfolio returns. Especially when companies like Facebook are looking into rolling their own altcoins, there is plenty of space in the market as blockchain technology matures and evolves over time.
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