Get Trading Recommendations and Read Analysis on Hacked.com for just $39 per month.Litecoin is the biggest Altcoin
Even if they do not accurately understand how it works, most people are at least somewhat familiar with Bitcoin. However, once they begin to get involved with cryptocurrency, they may be surprised to learn that there are actually hundreds of types of cryptocurrencies known as altcoins. Altcoins are anintriguingfacet of the cryptocurrency landscape, but they are not foreveryone. Altcoin newcomers often have many questions, and this guide will provide a brief overview of altcoins to help beginners decide whether or not to invest in them as part of their cryptocurrency portfolio.
The word altcoin is an abbreviation of Bitcoin alternative, and thus describes every single cryptocurrency except for Bitcoin. Altcoins are referred to as Bitcoin alternatives because, at least to some extent, most altcoins hope to either replace or improve upon at least one Bitcoin component.
There are hundreds of altcoins (CoinMarketCap listed 478 at the time this guide was written), and more appear each day. Mostaltcoins are little more than Bitcoin clones, changing only minor characteristics such as its transactions speed, distribution method, or hashing algorithm. Most of these coins do not survive for very long. One exception is Litecoin, which was one of the first altcoins.In addition to using a different hashing algorithm than Bitcoin, Litecoin has a much higher number of currency units. For this reason, Litecoin has branded itself as silver to Bitcoins gold.
However, some altcoins innovate by experimenting with useful features Bitcoin does not offer. For example, Darkcoin hopes to provide a platform for completely anonymous transactions, BitShares describes itself as a fair version of Wall Street, and Ripple serves as a protocol users can employ to make inter-currency payments with ease. Some altcoin ecosystems, such as CounterParty and Mastercoin, even utilize the Bitcoin blockchain to secure their platform.
Many Bitcoin enthusiasts argue that altcoins are completely unnecessary and will not succeed because they cannot rival the infrastructure Bitcoin boasts. However, altcoins serve an important role. Decentralization is one of Bitcoins most prominent goals, and altcoins further decentralize the cryptocurrency community. Moreover, altcoins allow developers to experiment with unique features. While it is true that Bitcoin can copy these features if the developers or community desires, fully-functioning altcoins are much better cryptocurrency laboratories than Bitcoins testnet. Finally, Altcoins give Bitcoin healthy competition. Altcoins give cryptocurrency users alternative options and forces Bitcoins developers to remain active and continue innovating. If users do not feel that Bitcoin satisfies their digital desires, they can adopt an altcoin. If enough users left Bitcoin for a particular altcoin, the Bitcoin developers would have to adopt the features the community desired or risk losing its place as the preeminent cryptocurrency.
Created in April 2011, Namecoin was the first altcoin. Although it also functions as a currency, Namecoins primary purpose is to decentralize domain-name registration, which makes internet censorship much more difficult. As its place among the top ten cryptocurrency market caps suggests, Namecoin has remained one of the most successful altcoins throughout its short lifespan.
Due to how recent cryptocurrency was invented and how rapidly the landscape changes, all cryptocurrency investments carry a great deal of risk. Even Bitcoinby far the most stable cryptocurrencyexhibits price volatility on a regular basis.
By comparison, however, altcoins are exponentially more volatile. Because they have such low market caps (the total value of all coins combined), altcoin markets are highly prone to price manipulation. Wealthy traderscolloquially called whalesoften inject large amounts of capital into low-priced coins to build hype and cause the price to skyrocket. Once the price has risen considerably, the whales sell their coins on exchanges at a massive profit, hurting many gullible investors in the process. This method is known as a pump and dump. Not only does this hurt greedy traders who did not take the time to do their homework, but it often proves to be the breath of an altcoins brief lifespan.
To avoid losing all your money in a pump and dump, focus on long-term investments in coins you believe have immense potential and exhibit overall health. Generally, healthy altcoins possess strong communities, exhibit high liquidity, and have developers who proactively improve the coins source code (though not necessary, many users also prefer developers who reveal their true identities).CoinGeckos comprehensive coin metric analysis algorithm statistically analyzes these three important factors and ranks coins according to overall strength.
If you do choose to invest in altcoins, it is important to remember somebasic tenets of investing. Avoid the hype that coin communities propagate. Investors have an agenda, so you should not take their word at face value. Only invest in coins you have researched. It is unwiseto invest in something you do not understand. Making an ill-informed investment is the first step to losing your hard-earned money. Take the time to research the coins you are considering for long-term investments, and research day-trading before you attempt to become a high-volume, short-term trader. Most importantly, never invest more than you can afford to lose. Far too many people have lost their life savings by centralizing them in volatile investments.
As with Bitcoin, there are a variety of ways to obtain altcoins. The most basic way to obtain altcoins is to accept them as payment for goods or services. If you are interested in doing this, place an ad showcasing your skill-set ona cryptocurrency job board.
You can also trade for altcoins on cryptocurrency exchanges. Most exchange use Bitcoin as an intermediary (although a few include fiat pairs), so if you do not already own bitcoins you will need to buy some before you can trade for altcoins. Some of the most-trafficked exchanges include BTER,Bittrex, MintPal,Cryptsy, and BTC38 (Chinese-only).
Many altcoin communities also sponsor giveaways to increase exposure of their coin and enticenew users to join their communities. This is a great way to acquire coins if you are low on fundsor do not have marketable skills.
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Read more from the original source:
What is an Altcoin? - ccn.com
- Crypto Analyst: Evil Whales Behind Bitcoin, Ethereum, EOS and Altcoin Market Rallies in 2020 - The Daily Hodl - February 23rd, 2020
- Past Crypto Cycle Highlights Altcoin Underperformance, But Perfect Storm is Coming - newsBTC - February 23rd, 2020
- Crypto Strategists: This Forgotten Altcoin Just Left the Launch Pad and Is Ready to Take Flight - The Daily Hodl - February 23rd, 2020
- Bitcoin (BTC) Dominance Pullback Crashing Altcoins Is This End of Altcoin Season? - U.Today - February 23rd, 2020
- Why TRON, XRP, and Cardano (ADA) just plunged 12% in a severe altcoin correction - CryptoSlate - February 23rd, 2020
- Bitcoin SV Dips 33% amid Altcoin Season Bust and More Losses are Coming - newsBTC - February 23rd, 2020
- Here's Why Even as a Bitcoiner you Shouldn't Ignore Ethereum - Bitcoinist - February 23rd, 2020
- Bit-comment: Bitcoin does not keep up with the altcoin''s rebound - MENAFN.COM - February 23rd, 2020
- Ethereum max out till date - BTC Wires - February 23rd, 2020
- Heres Why Litecoin Is Leading The Rise Of Altcoin Dominance - ZyCrypto - February 23rd, 2020
- Veteran Analyst Warns of XRP Crash to $0.20 as Price Stumbles - Ethereum World News - February 23rd, 2020
- Altcoin Dominance Rising: Ethereum Leads, XRP and Litecoin Lag - Crypto Briefing - February 13th, 2020
- Crypto Market Has All Signs of an Explosive Altcoin Season Brewing - newsBTC - February 13th, 2020
- Ethereum Price (ETH) Has Surged 92% in 2020 With Targets Set on $300 - Cointelegraph - February 13th, 2020
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- Altcoin Explorer: Kyber Network, the On-Chain Liquidity Protocol Leading the DeFi Sector - BTCMANAGER - February 13th, 2020
- The Insolar (INS) Dilemma - Finance and Funding - Altcoin Buzz - February 13th, 2020
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- Bitcoin Dominance Could Cause Catastrophic Ending to Current Altcoin Season - newsBTC - February 10th, 2020
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- Three Crypto Assets Surged More Than 175%, Beating Bitcoin, As Altcoin Market Exploded in January - The Daily Hodl - February 6th, 2020
- Bitcoin vs. Altcoins: Which Will Make You More Money in 2020? - Bitcoinist - February 6th, 2020
- Bitcoin bull trend approaches 10K as altcoin season is a reality - FXStreet - February 6th, 2020
- Alt Season Cancelled: XRP, Ethereum, and Litecoin All Trigger Sell Signal - newsBTC - February 6th, 2020
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- Global Altcoin Breakout Could Usher Return of Alt Season Crypto Riches - newsBTC - February 4th, 2020
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- Crypto Update: Ethereum Breaks Long-Term Trendline With Bulls Still In Control - Hacked - February 2nd, 2020
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- This Class of Once Hyped Altcoins Is Headed To Zero - newsBTC - January 29th, 2020
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- Crypto Today: Bitcoin and major altcoins retreat from recent highs, still strong in the long run - FXStreet - January 29th, 2020
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- Bitcoin Dips $300 And Recovers As Altcoins Continue The Mini-Season: Wednesday Market Watch - CryptoPotato - January 29th, 2020
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- Poll Shows Crypto Investors Expect ChainLink To Be Top Performing Altcoin in 2020 - newsBTC - January 14th, 2020
- These 4 Factors Suggest the Altcoin Crypto Market Rally is Only Just Beginning - newsBTC - January 14th, 2020
- Is This The Return Of The Altseason? Pumped Up Altcoins Leave Bitcoin In The Wind - ZyCrypto - January 14th, 2020
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- Cobinhood is the Latest Altcoin Exchange to Shut Down - NullTX - January 12th, 2020
- Litecoin Gains 10% Against The Dollar, Is This The Start of an Altcoin Rally? - newsBTC - January 12th, 2020
- Dash Surges by Over 16% as Bitcoin Price Hovers At $8,100 - Cointelegraph - January 12th, 2020
- More Altcoin Mining to be Integrated by Mining Pools in 2020 - Report - Cryptonews - January 10th, 2020
- Ethereum, Monero hashrate mainly concentrated in Europe - AMBCrypto - January 10th, 2020
- 4 Signs the Cryptocurrency Altcoin Market May Have Finally Bottomed - Cointelegraph - January 10th, 2020
- All 4 Past Januaries Started A Different Altcoin Trend, Will January 2020 Ignite a New Altcoin Season? - CryptoPotato - January 10th, 2020
- Dead Crypto Projects Declined in 2019, Are Altcoins Reviving? - Bitcoinist - January 10th, 2020
- Stellar jumps 8% as Bitcoin taps $8,000; what will push XLM even higher? - CryptoSlate - January 10th, 2020
- Chainlink and Loopring Are Now "Partners in Crime" - Business Partnerships - Altcoin Buzz - January 10th, 2020
- Upbit Exchange to Re-Open XRP, LTC and EOS Trading - Bitcoinist - January 10th, 2020
- Altcoin Explorer: Tether, The Worlds First Successful Stablecoin - BTCMANAGER - January 10th, 2020
- Heres What Altcoins Rally Means for Where the Crypto Markets are Heading Next - newsBTC - January 5th, 2020
- Momentum Within Altcoin Market Could Spark Massive XRP Rally, But Will it Be Sustainable? - newsBTC - January 5th, 2020
- This Small-Cap Altcoin Is Quietly up Over 50% in the Last 2 Days - SludgeFeed - January 5th, 2020
- ElectraPay is Another Altcoin Payment Solution no one Really Needs - The Merkle Hash - January 5th, 2020
- Ethereum [ETH/USD] Technical Analysis: Price Remains Unmoved as Users clamor for Altcoin Revolution ... - TWJ Crypto - January 5th, 2020
- 2019: Alt-Season has comeand gone - Where is altcoin heading in 2020? - FXStreet - December 30th, 2019
- Ethereum, XRP, and BCH: Why Traders are Optimistic on Altcoin Market - newsBTC - December 30th, 2019
- Altcoin Apocalypse: Which Crypto Assets Will Survive Another Year - newsBTC - December 30th, 2019
- XRP, Bitcoin are the most bought coins on Coinbase - AMBCrypto - December 30th, 2019
- Heres Why XRP Price Could Soon Burst 60% Higher - Ethereum World News - December 30th, 2019
- 2019 in review: Which altcoins performed the best vs Bitcoin? - Coin Rivet - December 27th, 2019
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- NULS Hacked. $480 Worth of NULS Token Stolen - Cryptocurrency Regulation - Altcoin Buzz - December 27th, 2019
- 2019 in review: Which altcoins performed the best vs Bitcoin? - Yahoo Finance - December 24th, 2019
- Altcoins bubble on the way, crypto market cap may reach $11 trillion by 2023 - FXStreet - December 24th, 2019
- Litecoin price prediction 2020: can it become the best-performing altcoin of the coming decade? - Capital.com - December 24th, 2019