Altcoins (alternative coins) are digital currencies that are different from Bitcoins. There are hundreds of altcoins in the market and currently, there is no cap on the number of altcoins that can be out there. This can lead to a lot of confusion among new investors who want to learn more about different altcoins and decide which one they should invest in.
You can learn more info about bitcoin and other cryptocurrencies through informative content available here. In this article, we will discuss how to choose altcoins and how you can actually profit from your crypto investing.
Type of Altcoins – Points To Note
The standard four categories of Altcoins are:
- Utility coins: These coins are developed keeping a specific objective and function within the blockchain. A basic attention token or BAT, Funfair, along with Ethereum itself, is one of the examples.
- Stablecoins: These coins are pegged or backed by another stable asset like fiat currencies and commodities. USDC and Binance Dollar are some of the common examples.
- Governance coins: These governance Altcoins allow users to submit and vote on community ideas that affect the project’s future. Uniswap Protocol and Maker are some of the shared governance Altcoins.
- Meme coins: Meme coins have experienced some level of viral renown for various reasons. Internet excitement and social media chatter nearly always determine their value. Some famous examples of meme coins are Shiba Inu, Dogecoin, etc.
Common Altcoins
The common types of Altcoins are:
- Ethereum: This is the second-biggest cryptocurrency and the second-largest Altcoin. However, of late, many investors and experts have yet to deem it as an Altcoin due to its price stability. It was launched with smart contracts, which increased the number of Defi. It can be used to long short, lend and borrow and can be used to develop decentralized apps using ETH.
- XRP: XRP is the coin of ripple, a digital platform, and they have its coin. One of the main differences between Bitcoin and ripple is that it is based on a consensus mechanism and not on a proof of work mechanism like Bitcoin. As a “bridge,” it connects the exchange of assets and settlement.
- EOS: Ethereum’s biggest problem is that it is not developer friendly. To solve this problem, EOS was developed, as it provides a developer-friendly environment along with faster and free transactions. Transactions on this blockchain can be confirmed significantly more quickly, thanks to DPoS.
- Litecoin: Litecoin is a form of the branch of Bitcoin and is the light version of Bitcoin. Its transaction speed is four times that of Bitcoin as the hashing speed and blocks production speed are much higher than Bitcoin. However, it could be more popular due to its redundant objectives and features.
- Uniswap: This is an Ethereum blockchain-backed Altcoin that is also one of the very first decentralized exchanges. The ERC-20 algorithm is built within the Uniswap platform. Due to its open-source nature, it has inspired several imitation rivals in the market.
- Cronos: The Crypto.org Chain’s native token is Cronos (CRO). The Crypto.org Chain was established to connect cryptocurrency projects and, on the flip side, expand businesses’ capacity to accept cryptocurrencies as payment. You can utilize the CRO or Cronos cryptocurrency for settlement, staking, and other purposes.
How to buy Altcoins?
Market activity has increased due to the rapid growth of Altcoin exchange platforms brought on by the launch of various new cryptocurrencies. Although this is not a hard and fast rule, and user experiences may vary, a more significant market cap tends to imply a safer investment.
Trading Altcoins is possible on several sites. However, the privacy rules and functionality offered by each of these sites vary. Scams and flaws exploited on various exchange platforms have also cost many consumers money.
Therefore, it is the responsibility of each investor to trade on a trustworthy exchange. If an investor decides to engage in direct trades with another investor in a private setting, they should take the time to choose trustworthy counterparties. Before investing money, one of the most excellent strategies to safeguard their assets is conducting thorough research on every site and trader.
Conclusion
For all that altcoins have endured over the past three years, they’ve proven themselves to be a vital part of the cryptocurrency ecosystem. They haven’t supplanted Bitcoin by any means. But there’s enough room in crypto for multiple currencies to thrive, and altcoins will continue to prove their strength moving forward.
