Get Trading Recommendations and Read Analysis on Hacked.com for just $39 per month.Litecoin is the biggest Altcoin
Even if they do not accurately understand how it works, most people are at least somewhat familiar with Bitcoin. However, once they begin to get involved with cryptocurrency, they may be surprised to learn that there are actually hundreds of types of cryptocurrencies known as altcoins. Altcoins are anintriguingfacet of the cryptocurrency landscape, but they are not foreveryone. Altcoin newcomers often have many questions, and this guide will provide a brief overview of altcoins to help beginners decide whether or not to invest in them as part of their cryptocurrency portfolio.
The word altcoin is an abbreviation of Bitcoin alternative, and thus describes every single cryptocurrency except for Bitcoin. Altcoins are referred to as Bitcoin alternatives because, at least to some extent, most altcoins hope to either replace or improve upon at least one Bitcoin component.
There are hundreds of altcoins (CoinMarketCap listed 478 at the time this guide was written), and more appear each day. Mostaltcoins are little more than Bitcoin clones, changing only minor characteristics such as its transactions speed, distribution method, or hashing algorithm. Most of these coins do not survive for very long. One exception is Litecoin, which was one of the first altcoins.In addition to using a different hashing algorithm than Bitcoin, Litecoin has a much higher number of currency units. For this reason, Litecoin has branded itself as silver to Bitcoins gold.
However, some altcoins innovate by experimenting with useful features Bitcoin does not offer. For example, Darkcoin hopes to provide a platform for completely anonymous transactions, BitShares describes itself as a fair version of Wall Street, and Ripple serves as a protocol users can employ to make inter-currency payments with ease. Some altcoin ecosystems, such as CounterParty and Mastercoin, even utilize the Bitcoin blockchain to secure their platform.
Many Bitcoin enthusiasts argue that altcoins are completely unnecessary and will not succeed because they cannot rival the infrastructure Bitcoin boasts. However, altcoins serve an important role. Decentralization is one of Bitcoins most prominent goals, and altcoins further decentralize the cryptocurrency community. Moreover, altcoins allow developers to experiment with unique features. While it is true that Bitcoin can copy these features if the developers or community desires, fully-functioning altcoins are much better cryptocurrency laboratories than Bitcoins testnet. Finally, Altcoins give Bitcoin healthy competition. Altcoins give cryptocurrency users alternative options and forces Bitcoins developers to remain active and continue innovating. If users do not feel that Bitcoin satisfies their digital desires, they can adopt an altcoin. If enough users left Bitcoin for a particular altcoin, the Bitcoin developers would have to adopt the features the community desired or risk losing its place as the preeminent cryptocurrency.
Created in April 2011, Namecoin was the first altcoin. Although it also functions as a currency, Namecoins primary purpose is to decentralize domain-name registration, which makes internet censorship much more difficult. As its place among the top ten cryptocurrency market caps suggests, Namecoin has remained one of the most successful altcoins throughout its short lifespan.
Due to how recent cryptocurrency was invented and how rapidly the landscape changes, all cryptocurrency investments carry a great deal of risk. Even Bitcoinby far the most stable cryptocurrencyexhibits price volatility on a regular basis.
By comparison, however, altcoins are exponentially more volatile. Because they have such low market caps (the total value of all coins combined), altcoin markets are highly prone to price manipulation. Wealthy traderscolloquially called whalesoften inject large amounts of capital into low-priced coins to build hype and cause the price to skyrocket. Once the price has risen considerably, the whales sell their coins on exchanges at a massive profit, hurting many gullible investors in the process. This method is known as a pump and dump. Not only does this hurt greedy traders who did not take the time to do their homework, but it often proves to be the breath of an altcoins brief lifespan.
To avoid losing all your money in a pump and dump, focus on long-term investments in coins you believe have immense potential and exhibit overall health. Generally, healthy altcoins possess strong communities, exhibit high liquidity, and have developers who proactively improve the coins source code (though not necessary, many users also prefer developers who reveal their true identities).CoinGeckos comprehensive coin metric analysis algorithm statistically analyzes these three important factors and ranks coins according to overall strength.
If you do choose to invest in altcoins, it is important to remember somebasic tenets of investing. Avoid the hype that coin communities propagate. Investors have an agenda, so you should not take their word at face value. Only invest in coins you have researched. It is unwiseto invest in something you do not understand. Making an ill-informed investment is the first step to losing your hard-earned money. Take the time to research the coins you are considering for long-term investments, and research day-trading before you attempt to become a high-volume, short-term trader. Most importantly, never invest more than you can afford to lose. Far too many people have lost their life savings by centralizing them in volatile investments.
As with Bitcoin, there are a variety of ways to obtain altcoins. The most basic way to obtain altcoins is to accept them as payment for goods or services. If you are interested in doing this, place an ad showcasing your skill-set ona cryptocurrency job board.
You can also trade for altcoins on cryptocurrency exchanges. Most exchange use Bitcoin as an intermediary (although a few include fiat pairs), so if you do not already own bitcoins you will need to buy some before you can trade for altcoins. Some of the most-trafficked exchanges include BTER,Bittrex, MintPal,Cryptsy, and BTC38 (Chinese-only).
Many altcoin communities also sponsor giveaways to increase exposure of their coin and enticenew users to join their communities. This is a great way to acquire coins if you are low on fundsor do not have marketable skills.
Featured images from Shutterstock.
Read more from the original source:
What is an Altcoin? – ccn.com
- Bitcoin History Part 5: A Wild Altcoin Appears - Bitcoin News - January 9th, 2019
- Latest News on Altcoin | Altcoin Breaking News | DC Forecasts - January 9th, 2019
- Altcoin Daily Preview: Tron (TRX) Could Bounce back ... - January 9th, 2019
- Most promising Altcoins and ... - Captain Altcoin - January 8th, 2019
- Altcoin - Investopedia - December 12th, 2018
- GoChain (GO): Here's Why This Altcoin Might $GO All The ... - November 10th, 2018
- Find The Best Bitcoin, Altcoin, or Multi-Cryptocurrency ... - November 10th, 2018
- Altcoins Explained | The Best Altcoin Guide for the Beginning ... - October 3rd, 2018
- Altcoin.io | The cryptocurrency exchange of the future | Wefunder - September 30th, 2018
- Android Bitcoin ~ Altcoin Price Ticker ~ Coin Maker - September 4th, 2018
- 7 Altcoin Exchanges Without KYC & AML - CoinSutra - August 22nd, 2018
- Altcoin News Archives - Ethereum World News - August 7th, 2018
- How to Choose Which Altcoin to Invest In? - Coinidol.com - August 7th, 2018
- Altcoin News | Altcoin News today | Latest Altcoin News - July 27th, 2018
- USING ALTCOIN TRADER - rsainvestments.blogspot.com - June 24th, 2018
- Guide: Compiling an altcoin daemon in Ubuntu Linux ... - May 31st, 2018
- Top 3 Altcoin Trading Exchanges - [Reviews and Ratings] - May 27th, 2018
- PacCoin VPS Masternode Guide AltCoin Guide - May 12th, 2018
- Asian Cryptocurrency Trading Roundup: Top Altcoin is Tron ... - May 10th, 2018
- Alternate Cryptocurrencies aka altcoins r/altcoin - reddit - May 9th, 2018
- Garzik Forks UnitedBitcoin Away from "Maximalists" to Support Altcoin ... - April 13th, 2018
- Bitcoin, Altcoin and Cryptography explained - April 4th, 2018
- ZClassic and the Bitcoin Private fork : altcoin - March 4th, 2018
- Altcoin Trustworthy Decentralized Cryptocurrency Exchange? - March 4th, 2018
- Blockfolio Bitcoin Altcoin App on the App Store - March 4th, 2018
- Morning Asian Altcoin Trading Roundup: the leader is Tron - February 28th, 2018
- Webinar: Bitcoin Overshadowed by Altcoin Surge - Nasdaq.com - February 12th, 2018
- Bitcoin Mine News Bitcoin & Altcoin Mining & Trading News - January 7th, 2018
- Ethereum, Litecoin Prices Headline $20 Billion Altcoin Rally - January 7th, 2018
- What is an Altcoin? - CryptoCurrency Facts - January 4th, 2018
- Trading Bitcoin for an Altcoin Won't Shield You From the IRS ... - December 20th, 2017
- Buy or Sell Bitcoin, Litecoin, Altcoin Multi Crypto Currency ... - December 20th, 2017
- Altcoin Exchange Performs First Atomic Swap Between Bitcoin ... - December 6th, 2017
- GitHub - ander7agar/altcoin-rpc: A modern Bitcoin Core REST ... - December 2nd, 2017
- Altcoins - BTCMANAGER - November 28th, 2017
- Markets Update: Bitcoin Bull-Run Primes Altcoin Markets for ... - November 25th, 2017
- Altcoin Exchange, the Decentralized Cryptocurrency Exchange ... - October 17th, 2017
- Altcoin Watchlist | Meet & Learn Cryptocurrencies - October 4th, 2017
- CryptoCurrency Investing: Research and Due-Diligence ... - September 6th, 2017
- ATC Coin Review: ATCC altcoin with massively inflated ... - September 5th, 2017
- JRM Altcoin Update - Quit chasing the headlines! - YouTube - September 4th, 2017
- Bitcoin Cash Statistics Confirm BCH is Just Another Altcoin - Live Bitcoin News - September 2nd, 2017
- Which Altcoins to Buy This Week? (31st of August, 2017) - Live Bitcoin News - September 1st, 2017
- OpenBazaar Developers May Introduce Altcoin Support in the Near Future - The Merkle - August 27th, 2017
- Exante launches XAI, the world's first altcoin fund - GlobeNewswire (press release) - August 25th, 2017
- ALTCOIN | Bitcoin Insider - August 23rd, 2017
- Altcoin Forum - Alternative Cryptocurrecies Location - August 23rd, 2017
- Op Ed: Drivechains Could Kill Off the Altcoin Market - August 22nd, 2017
- Nakamoto Institute Daniel Krawisz: I Don't Like Altcoins, but I Like Forks - Bitcoin News (press release) - August 22nd, 2017
- Bithumb, Highest Volume Exchange Globally, Adds Monero - Inside Bitcoins - August 22nd, 2017
- One-Man Band To Create The Second Altcoin Forum In The World - Coin Idol (press release) - August 18th, 2017
- When altcoin life imitates art - FT Alphaville (registration) - August 14th, 2017
- ALTCOIN CAPITAL - Trusted Crypto Traders - August 12th, 2017
- Overstock Now Accepts Various Altcoins for Payment - Including ... - Bitcoin News (press release) - August 10th, 2017
- What are Altcoins and ICOs Bitcoin Whiteboard Tuesday - 99 Bitcoins (blog) - August 9th, 2017
- Cryptocurrency Symbol BCC Belongs to BitConnect Coin, Not Bitcoin Cash - Markets Insider - August 8th, 2017
- Crypto-Startup Hubcoin Announces Distribution of Pre-Mined HUB to Altcoin Developers - Bitcoinist - August 3rd, 2017
- This Altcoin Is Ready to Challenge Bitcoin's Domination of the ... - Futurism - July 31st, 2017
- Beginning of altcoin's end: US signals digital coins may be subject to federal securities law - CalvinAyre.com - July 31st, 2017
- All Major Indian Exchanges Reject Bitcoin Cash Completely - Live Bitcoin News - July 31st, 2017
- Global Advisors Launches ICO and Altcoin Closed-End Private Fund - Finance Magnates - July 31st, 2017
- USING ALTCOIN TRADER - rsainvestments.blogspot.co.za - Google - July 9th, 2017
- Payza Commits to Cryptocurrency: Unveils Full Bitcoin Services, Introduces Altcoin Exchanges - CoinDesk - July 7th, 2017
- What is an Altcoin? Bitcoin Magazine - July 7th, 2017
- CryptoPing completes $2.5 million ICO to further develop altcoin trading intel bot - CryptoNinjas - July 4th, 2017
- Saturday Slump: Ethereum, Bitcoin Prices Headline Crypto Market Downturn - CryptoCoinsNews - July 1st, 2017
- Monday Massacre: Bitcoin, Ethereum Lead the Way as Cryptocurrencies Retreat into the Red - CryptoCoinsNews - June 26th, 2017
- Altcoin signal app CryptoPing set to conclude ICO with over $1m already raised - CryptoNinjas - June 25th, 2017
- EasyMINE: Altcoin Mining for Everyone - Coin Idol (press release) - June 22nd, 2017
- Altcoin 2017 Forecast: Litecoin (LTC), Peercoin (PPC ... - June 18th, 2017
- Which Altcoins To Buy This Week (16th of June, 2017) - Live Bitcoin News - June 17th, 2017
- Bitcoin Altcoin Trader Price Analysis - June 13th, 2017
- 'Real Businesses are Using Waves', Says Rep as Altcoin Crosses $600 Million Market Cap - CryptoCoinsNews - June 11th, 2017
- Altcoin Definition | Investopedia - June 9th, 2017
- Top 6 Altcoin Exchanges you may Have Never Heard of - The Merkle - June 8th, 2017
- Which Altcoins To Buy This Week (6th of June, 2017)? - Live Bitcoin News - June 6th, 2017
- Altcoin intel bot CryptoPing ICO now live - CryptoNinjas - June 5th, 2017
- Bitcoin (BTC), Ethereum Just The Tip Of The Iceberg For Cryptocurrencies - ETF Daily News (blog) - May 30th, 2017
- All Top 20 Altcoins Fall By At Least 30%, Ripple Down to $6.2 Billion - CryptoCoinsNews - May 28th, 2017
- CryptoPing, the Cryptocurrency Bot that Monitors Altcoin Markets. ICO in 48 Hours! - FinSMEs (blog) - May 24th, 2017