Bitcoin is not the only cryptocurrency on the blockchain, there are thousands of other cryptocurrencies are called Altcoins. In other words “The crytocurrencies which are not bitcoin are called Altcoins“.
Altcoin is not the cryptocurrency this is terminology used to describe. Code of Altcoins are open source you can download and read. And even you can change to make new Altcoin.
Why we need Altcoin coin in cryptocurrency :
Why people keep creating new Altcoins ? There are 2 reasons for it
- Bitcoin is the first crytocurrency developed in 2009 and still the biggest one but people think it has some flaws which prevent it from being a good crytocurrency. For example transaction processing is slow, because bitcoin requires more electricity to resolve the mathematical puzzle, and higher transaction fee. Then people decided to create new crytocurrency (Altcoins), with better performance. For example Litcoin is more faster than bitcoins and has very less transaction fee, Monero transactions are hidden and not trackable. It means every new Altcoin is somehow has different feature. There are tons of crytocurrencies you can read their white paper to know about them.
- And the second reasons is Dollars yeah!. People brought the crytocurrency in the market by keeping the dollar sign in the eye. So they can sell their coins and earn money. There are thousands of Altcoins in the market but few get famous. One way to measure the popularity of coin is MarketCap = coin x exchange rate
Some of the Altcoins are the fork of bitcoin. For example Bitcoin cash is the fork of bitcoin meaning they download the code of bitcoin and changed it’s architecture to make faster transactions and new cryptocurrency is developed.
But bitcoin is the dollar of other crytocurrencies, you need bitcoins if you want to buy any other cryptocurrency. The price of Altcoins goes up and down with price of bitcoin respectively.
How to decide in which Altcoin to invest :
First of all invest very small amount of money in the Altcoins that you can offer to loose. You have to check these things before investing in Altcoins.
- Read about the Altcoin, you want to invest, When any Altcoin launches they provide its white paper also, you can read them.
- Don’t invest on the coin too fast, because most of the creators creates hype about it.
- Involve in their community and ask the questions from their developers. More stronger the community more stronger the chances of crytocurrency to get famous.
That was the small intro about the Altcoins if you like the article please comment and share.