Interest in the cryptocurrency niche is growing, and for a long time has not focused only on the first one – bitcoin. A huge number of other currencies are also worthy of attention. But even now, among people who have been interested in crypto thematic and interact with it for quite a long time, there are those who work exclusively with “bitcoin”. The reasons are different, but mostly it is fear from ignorance. What are altcoins, and what do they do?
What are altcoins?
It is easier than it may seem. Absolutely all cryptocurrencies other than Bitcoin are called altcoins (alternative coin). But this does not mean that they are worse. It’s just that by the time the first token with similar functionality appeared, almost two years had passed. Bitcoin has established itself as a revolutionary digital currency based on blockchain technology. By the mass emergence of others with similar functionality, they were classed as altcoins because most used the open source code of the original. Many people tried to copy the idea completely with minor changes and try to create a more popular independent digital currency.
Nowadays, there is a lot of difference between them. Most startups that are based on blockchain have their own cryptocurrency. The number is growing every day and all of them are created to solve different problems. There are projects that develop cloud storage, with distributed data storage inside blockchain, other teams create them for use in a particular niche, for example, as a substitute for likes on social networks. The more the technology develops, the more applications it finds. But even among cryptocurrencies, where the main goal is to replace fiat, there are differences. For example, the speed of transaction.
In bitcoin, it can take several hours. This was one of the first and main tasks that the developers of altcoins tried to solve. Another part of the teams focused on creating an anonymous altcoin, where it will not be possible to connect the owner of the wallet with a real person. Depending on how useful was the functionality, communities began to appear around a particular crypto. Some of them also appeared and disappeared because of the lack of interest in them.
How to use altcoins?
The first and most obvious option is trading. Many professionals came here from classic market, because they can often fix a larger profit in short terms during peak periods. The main reason is in the high volatility. Some coins fluctuate greatly in the price even within a trading day. Due to this, understanding how a particular crypto should behave, it is possible to earn much more, a couple of percents of the deposit. Another popular method is mining.