BTCBIT logotype in a form of an uppercase B letter made from blue colored triangles

What is Altcoin?

Cryptocurrencies are fast gaining prominence with the increasing level of digital trading. Although Bitcoin was the first major cryptocurrencies, the increasing number and types of cryptocurrencies make it important to pay attention to these new cryptocurrencies. This article explores these other cryptocurrencies.

Just in case you’re wondering what altcoins mean, cryptocurrencies apart from Bitcoin are referred to as Altcoins. This term is said to be obtained from “alternative to bitcoin”. A lot of altcoins are created by the slight modification of some of Bitcoin's basic rules. Although some of these altcoins are created from scratch.

Some of the most popular altcoins currently existing are established on the same principles as Bitcoin. Using the Bitcoin template to create an altcoin is relatively easier since Bitcoin is an open-source platform that can be accessed for free. Usually, the evolution of a new cryptocurrency as a result of modifications to the consensus rule of an existing cryptocurrency is called forking. In the instance that an altcoin forks at the blockchain level, there is a need to establish an alternate system of consensus rules to be used for such coin and the new altcoin will have a different distributed ledger. This also applies to altcoins that are built from scratch.

There are, however, some altcoins that have different monetary policies in line with their use all to encourage variation in their use. Some altcoins have policies to guide spending limits or positive/negative interests on storing the coins for a long time, Also, just like Bitcoin, most altcoins can also be mined. The protocol for mining is however not always similar in all altcoins.

The way some altcoins are created might discourage ASIC and GPU mining. In most instances, this is put in place to reduce any extra privileges for miners. Apart from this, some altcoins also store data about a coin’s previous transactions or enable using the coin fee newly.

Some altcoins are designed to help founders make money. Therefore, it is important to get some basic knowledge about an altcoin before going ahead to trade with it. After Bitcoin, there have been over 500 altcoins created.

Some altcoins you might want to check out include;

• Litecoin (LTC)
Litecoin is currently one of the most popular cryptocurrencies in the world apart from Bitcoin. Litecoin was founded by Charlie Lee, a graduate of MIT and uses scrypt which even be decoded by some regular computers.

• Ethereum (ETH)
Ethereum is another fast-rising cryptocurrency. One of the things that make Ethereum popular is the fact that ETH has smart contracts.

• Zcash (ZEC)
Zcash was launched in late 2016 and is currently one of the most promising altcoins. Zcash offers users privacy and transparency. This is one reason why Zcash is gaining prominence as an altcoin.

• Dash (DASH)
Dash, or darkcoin as it was known, is a more secretive version of bitcoin. Dash works on a master code network that is decentralized. This makes transactions on dash largely untraceable. This feature is why DASH is commonly used in illegal transactions.

• Monero (XMR)
Monero is an open-source cryptocurrency launched in April 2014. Monero has generated a lot of interest in the cryptocurrency users’ community. This cryptocurrency is secure, private and not traceable. Monero allows users absolute privacy using a technique called “ring signatures”. As of early 2019, Monero had a market cap of $808.50 million.

• Bitcoin Cash (BCH)
Bitcoin Cash is a significant altcoin due to the fact that it is one of the earliest forks of the original bitcoin. Bitcoin cash evolved from the original Bitcoin and became a cryptocurrency by itself in August 2017. Bitcoin cash was created due to the scalability issues of Bitcoin; Bitcoin had a limit of the size of blocks. By increasing the size of blocks as was done in Bitcoin cash, the transaction time of the currency was also reduced.

NEO was founded in 2014 by Da Hongfei. It was originally referred to as AntShares. However, the altcoin was later re-branded. NEO is currently still the biggest cryptocurrency from China, some even refer to it as “Chinese Ethereum”. A major privilege the coin has enjoyed has been its acceptance by the Chinese government, which is unusual as the government has shown strict regulations for cryptocurrency in the region.

• Cardano (ADA)
Cardano was founded in 2017 by Charles Hoskinson, a co-founder of Ethereum. Cardano offers the advantages of Ethereum and even others. As of February 2019, the currency had a market cap of $1.16 billion.

As earlier mentioned, there are currently over 500 cryptocurrencies. Just like typical currencies, cryptocurrencies can also have changes in their value. Understanding altcoins and how they work can help you make the best investment choices in cryptocurrency, especially when considering exploring other cryptocurrencies apart from Bitcoins.
Category: Articles
Date: 14.10.2019 14:11

BTCBIT Articles

Follow BTCBIT on social media to keep up-to-date with the latest news, from a range of useful resources.