What are altcoins?Posted on: June 28, 2018, by : Dan Muresan
Are altcoins similar to bitcoin? Since the launch in 2008, Bitcoin (BTC) was known as the first cryptocurrency that revolutionized the money system we used until then. It was built on blockchain, transparent, decentralized. It was the first crypto coin, and because of that is the market dominator in terms of market share. Bitcoin dominance came down from 95% in 2013 to 41% today, with a low of 32% in January 2018.
So what fills in the percentages? Altcoins.
After Bitcoin started to get adoption and value, other blockchain based cryptocurrencies have started to compete with Bitcoin, but some of them have developed blockchain technology to different projects and solutions all over the internet.
Alternatives to bitcoin is the origin of the altcoin term. So what is an altcoin?
Altcoins are basically digital currencies, created with different specific goals, projects. Each new coins wants to solve a problem, to address an issue, to make easier the way we do something. Lots of altcoins have been largely adopted and accepted by the market. Some of them were called better than bitcoin. People are forecasting some altcoins as the new bitcoin. Others say that eventually one coin will surpass BTC in terms of market cap and adoption.
Ethereum is the second most known cryptocurrency.
It is a development platform that doesn’t work as a peer-to-peer coin, but it works on developing blockchain agreements on the ethereum network. These agreements are called smart contracts.
Imagine a smart contract as a computer protocol that can intermediate and also verify the negotiation or the performance of a contract. Smart contracts allow anyone to build and initiate transactions that are safe and secure, without third parties that need to intervene.
If you don’t know already, here you can find all cryptocurrencies, sorted based on marketcap: https://coinmarketcap.com/ It’s very interesting to watch all these altcoins: some of them have been in the top ten for many years, others have only a few months. You could say that the older ones, such as Litecoin or Ripple are the safe way to go. But in the end, newer ones, such as Cardano or EOS could be bringing the revolutionary technology and disruption. After all, they made it in top ten, isn’t it?
Altcoins are bringing new ways of creating amazing projects on blockchain.
More and more talented people start using blockchain technology, mostly creating ICOs. They try and launch their projects on blockchain because it’s an easy way of reaching to everyone, allowing anyone to invest. In order to get mass adoption and convince people that your concept/ project is worthy, you need a solid team, a clear roadmap, much dedication and a really good idea. Even so, most of the ICOs fail. Reasons are many, and I already talked a little bit about it, here.
All of these ICOs, after their launch, get their tokens to their investors and so, more altcoins appear.
The value of all altcoins, similar to Bitcoin’s value, is determined by all of us, the investors. We decide to support an ICO and invest in it, or keep our savings in different cryptocurrencies. Innovation and well known investors can back up a project since its early stages. But keep in mind that, even if there is a well known person behind a project, that doesn’t mean that it’s a good project. Lots of scams happened and lots of people lost their money. We have to be smart and do our own research. So, while you can get huge returns investing in ICOs, you can also lose your investment.
Always do your own research before investing in altcoins.
We will see if bitcoin will lose the lead in terms of market cap and if an altcoin will ever get to be the first on coinmarketcap.com. Meanwhile, altcoins get good returns to some, and losses to others, depending on everyone’s strategy: day trading, investing in ICOs, HODLing and so on.
It really is a rollercoaster.