Knowing the meaning of the word “Altcoin”
It is the combination of the English words “alternatives” and “coins”, that is, they are alternative currencies to the main one (Bitcoin), which are created with different purposes and can have different ways of working despite being in the same ecosystem
Because the BTC code is completely public and open, which person has ac
cess to it to understand its operation. This gave way to the creation of currencies that may or may not use said code as a “base”, making changes in it to implement improvements or new functions that are related to the project to be developed. For example, some characteristics that can be modified are the following:
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- The number of existing cryptocurrencies (In BTC are 21 million).
- The work test algorithm, that is, with which the mining is carried out. While Bitcoin uses SHA-256, an altcoin such as Litecoin uses the Scrypt algorithm. This change of algorithms also offers the ability to use different mining equipment, among which is the CPU, GPU and ASIC.
There is a large amount of altcoins in the market, which have been appearing over the years. Among the first is possible to find the Litecoin, Darkcoin, Dogecoin, Primecoin and many others.
As many have appeared, many others have disappeared, having created thousands of cryptocurrencies throughout these years. However, at present there are about 1,300 coins, of which only about 100-200 are popular in the main exchangers, since they account for 90% of the cryptocurrency market.
A relevant fact is that only Bitcoin represents 60% of the current market (363 billion dollars), so the other 40% is covered by alternative currencies, that is, the altcoins.
What are the advantages and disadvantages?
- Bitcoin is not a perfect currency, so it is necessary that other projects have the opportunity to present their functionality, features and innovations. So the altcoins allow you to innovate and even consider adding functions of them to the BTC code.
- The vast majority of alternative cryptocurrencies have some specific functionality or objective, so they usually have many uses to facilitate some work. For example, Monero allows completely anonymous transactions without the possibility of tracking.
- The vast majority of currencies, following the steps of Bitcoin, aim to implement “decentralization” in any area or sector, such as cloud storage, search engines, among others.
The only disadvantage that can be detailed of these currencies is the possibility that their creators have to swindle the community, offering a project and then leaving it. In addition to its high volatility, since having such a small market, speculating to inflate its value is very easy; so you should be careful with the new and low capitalization altcoin in the market.
What are the most popular altcoins?
To know which are the most popular, just review the market to see the first 100 cryptocoins with greater capitalization. However, we want to show you some of the most famous and their main features.
It is the currency with which the entire Ethereum network works, which is a Blockchain platform that allows any person, company or organization to create intelligent contracts, one of its main characteristics. In addition, it stands out the ease with which you can write codes to create coins, as well as reputation systems.
MIOTA is the cryptocurrency that works in the IOTA network, which is focused on the internet of things, in which there is a market that works in real time and without commissions. Basically it is a new technology, since it does not use the Blockchain but they have called it “Tangle” and it does not have scales, it is scalable, light and it is not necessary to have commissions.
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