What are Altcoins?
A Simple Definition
You grandfather may still be alive, but at some point, he had grandfathers as well. His grandfather had a grandfather and it goes on and on. Bitcoin is your grandfather and your father is an altcoin. In other words, Bitcoin is the first peer-to-peer cryptocurrency to be launched as a digital currently. Shortly after that, a few offsprings were born.
Altcoins are basically alternatives to Bitcoin. Bitcoin does have some limitations and flaws. Many of today’s altcoins are promoting themselves as better version or substitutes of Bitcoin. The term ‘altcoins’ represents all other cryptocurrencies or digital currencies which are not Bitcoin or come after Bitcoin.
Breaking Down Altcoins
Cryptocurrencies are digital currencies engineered to work as a means of exchange mostly on the Internet; it uses complex cryptography to ensure financial transaction are secured. They use decentralized control instead of a centralized banking system and centralized digital currency.
Since the launch of bitcoin, there have been a series of cryptocurrencies that are being developed. Just like we have a variation of dollars, pound, euro, yen for cash currency, we also have a variation of cryptocurrencies.
What is an Altcoin Again?
Altcoins, which is short for alternative coins, are coins that came after the huge success of bitcoins. Due to the success of bitcoin, a lot of digital currencies began to emerge in an attempt to copy the success.
Many altcoins were created to in attempt to fix the limitations of bitcoin. They’re pretty much trying to gain competitive advantage. There are hundreds of altcoins that have been developed since bitcoins, although bitcoin might be the most popular it just one of the numerous cryptocurrencies we have.
Altcoins are different from Bitcoin in a lot of different ways, such as mining mechanisms, coin-distribution methods, or the ability to create decentralized applications. Although altcoins were created to try to copy the success of bitcoins, they are different from bitcoins in a lot of ways like coin distribution methods, mining methods and the ability to create and use the decentralized application,
Many altcoins are built upon the basic framework provided by Bitcoin. This means that most altcoins are like peer to peer system that involves a mining process by which users solve difficult problems to unlock blocks, and offer efficient and cheap ways to carry out transactions on the web
Altcoins vary widely from each other and differentiate themselves from bitcoin with a range of procedural variations, including different algorithms for proof-of-work (mining for coins), application enhancements to increase user anonymity and various means by which users can sacrifice energy to mine blocks.
Types of Altcoins
The current leading examples of altcoins include Litecoin, Ethereum, Ripple, and Dogecoin. Although there are at least 100 altcoins, Litecoin is regarded as bitcoin’s closest competitor.
Litecoin was branded as the golden child of Bitcoin. Bitcoin is the ‘gold’ and LTC is supposedly silver. They both have similar codes and functionalities. Litecoin, however, is essentially differs from BTC in many ways.
Mining transactions are approved every 2 ½ minutes on Litecoin, and unlike bitcoin, it allows for about 84 million coins to be created, which is four times higher than that of Bitcoin’s. Litecoin uses a completely different proof-of-work algorithm compared to Bitcoin scrypt.
As at the year 2018, there were about 1,500 cryptocurrencies on the internet, of which all are altcoins except one, bitcoins. New cryptocurrencies are being created on a steady over the years. Additionally, there are also old cryptocurrencies that are no longer in use.
To Wrap It Up
Because the latest cryptocurency has the goal to be better than the previous one, the future is bright for the cryptocurency world. This is simply because the problems with the old ones are being solved by newer altcoins.
However, staying up to date with the development of cryptocurrencies may be tricky, and since there are literally thousands of them out there, one has to be careful on which to invest in; it requires a lot of thought and research.