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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.

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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.

The top 5 altcoins according to CoinMarketCap

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.

Namecoin was the first altcoin. It seeks to decentralize the world of online identities.

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.

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What is an Altcoin? - CryptoCoinsNews