What are Altcoins? (Full Review)

What are Altcoins? (Full Review)

26.04.2020
Altcoins

In today’s world there are almost no people who haven’t heard anything about Bitcoin. The idea of developing this cryptocurrency was to create an independent digital currency that would allow to pay for goods and services on the Internet. However, many don’t realize that besides it there are many alternative cryptocurrencies that have great potential.

What are Altcoins?

All cryptocurrencies that appeared after Bitcoin were called “Altcoins,” which means “alternative coin Bitcoin.”

The first altcoin appeared in 2011 under the namecoin, its basic idea and functionality was no different from Bitcoin. Soon many enthusiasts started their own cryptocurrency projects.

Why do we need Altcoins?

The developers of altcoins wanted to improve and eliminate the technical limitations of the first cryptocurrency, as well as create new options for electronic payments for every sphere of people’s lives, so today the list of altcoins has more than one and a half thousand different coins.

The main disadvantages of Bitcoin are:

  • Long-term transactions. Other algorithms should be used to speed up the transaction time. At the same time, Bitcoin has a large volume of blocks, which is quite slow to calculate the necessary transactions;
  • Low level of anonymity. Cryptocurrency developers have really tried and encrypted their transactions well, but there is an opportunity to track the sender and recipient. Many new altcoins have additional encryption methods;
  • Complicated and expensive mining process. Bitcoin mining is constantly becoming more complex, so every time you need to use more resources to form new blocks in Blockchain. In turn, altcoins use other protocols that significantly simplify the mining process and do n’t require serious equipment;
  • Lack of functionality. The main task of Bitcoin is to act as a tool for calculation. Altcoins have other functions, for example, creating a smart contract.
  • Technological innovation is another reason for the need for Altcoins. Each new project aims to introduce technological innovation, which is able to solve specific problems.

In today’s world, cryptocurrency trading has become an integral part of the financial world, so the more variants of altcoins, the more opportunities to diversify their investments.

Finally, most developers need access to blockchain. First of all, they are interested in a reliable data transmission system and the safe storage of important business information. To access this technology, you need to use altcoins.

Best Altcoin to invest in

Best Altcoin to invest in

Today there are a sufficient number of altcoins that deserve attention and in which you can invest. Despite the fact that altcoins are falling in price, many crypto experts claim that it is time to invest in them. If you want to know which altcoins to buy, then here is a table with the best options.

Name  Year of  Creation   Characteristics
Ethereum   2015 ETH is one of the most popular altcoin and the second most capitalized cryptocurrency, which was created in the blockchain Ethereum. The third most expensive cryptocurrency. Cryptocurrency is designed as a platform for creating smart contracts. Today, most ICOs take place on this platform.
Litecoin  2011 LTС is one of the first altcoin, which has the same characteristics as Bitcoin. However, its transactions in the blockchain are conducted at a higher rate. It doesn’t have a single center, so it is a fully decentralized payment network.
Ripple  2012 XRP is popular altcoin among banking and financial institutions. A platform for a payment system that focuses on currency exchange transactions. Suitable for long-term investments and the least risky compared to other altcoins.
Monero  2014 Altcoin, which has an extra layer of encryption. Absolutely anonymous, so it is often used for confidential payments. Since Monero is produced in very small quantities, the demand for it is constantly growing, so the price of altcoin increases with it.
Dash  2014 Actively gaining popularity of altcoin, which is aimed at a high level of anonymity. Cryptocurrency is so decentralized that every member of the network has the opportunity to present their ideas on its development or vote for other initiatives. Dash is easy to use to make daily payments because this altcoin has the function of instant transactions.
IOTA  2015 Altcoin, aimed at servicing the operations of the new project of the global network “Internet of Things.” IOTA has partnered with giants such as Microsoft, Samsung, Cisco, Volkswagen and Google. The forecast of most analysts is the same, more than 50% of all devices by 2022 will be connected to the Internet of Things network, and accordingly within it will “function” its own payment facility.

Where to store Altcoins?

If you decide to invest in altcoins, it is worth taking care of the safe storage of your investments in advance.

Here are the main ways to store:

  • Storage of altcoins on the stock market wallet. This possibility exists on almost all exchanges. We do not recommend this option, as it may be unsafe, because the exchange may suddenly close or be subjected to a hacker attack. In this case, it will be almost impossible to return the funds. The exchange is more suitable for short-term storage or trading.
  • Storage of altcoins in a crypto wallet. At the moment there is a large selection of wallets for the most popular cryptocurrencies. For your convenience, you can choose from web wallets, mobile, desktop, browser extensions and hardware (cold) wallets.

Conclusion

This article should help novice cryptocurrency enthusiasts to understand what altcoin is and determine promising investment directions. Don’t forget that despite the fact that Bitcoin is still considered the most popular cryptocurrency, do not underestimate many altcoins.

This article should not be interpreted as an investment board, all decisions you make at your own risk.

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