Bitcoin was the first digital currency to be created that existed completely in the virtual space with no tangible presence. Since all Bitcoin transactions are secured cryptographically, it became the first cryptocurrency to be popular among the masses all around the globe. Also, the decentralized blockchain technology on which Bitcoin is based was one of the major factors that made it different from fiat currency. Check out this link https://www.chesworkshop.org/
Though this digital currency received a lukewarm response on the global scene due to a variety of factors, the main one being that as with all new entities, people were skeptical about its survival in the years to come. However, there were many innovators like Satoshi Nakamoto who had a different concept of what an ideal financial market must be but in the absence of a reference point could not proceed with their ideas.
Bitcoin provided them with that platform and also became a source from where the idea of bigger and better versions of cryptocurrencies originated. Bitcoin is considered the pioneer in the world of cryptocurrency that has over the years carved a niche for itself. Since then, thousands of developers have created crypto coins, and since most of them have based themselves on the original cryptocurrency, other cryptocurrencies have been introduced as an alternative to Bitcoins, they are collectively referred to as altcoins.
Meaning of altcoin
The word altcoin is a combination of two separate words. While alt is derived from the term alternative, coin refers to all tokens and cryptocurrencies besides Bitcoin. However, some cryptocurrency proponents view Ethereum as an independent cryptocurrency just like Bitcoin and not as a part of the altcoins. The reason for their doing so is that most cryptocurrencies have their source in the blockchain of either Bitcoin or Ethereum from where they have forked to create their own identity as a separate coin.
The first altcoin
Just two years after the introduction of Bitcoin, its first alternative, Namecoin was launched in 2011. It was founded on the same Bitcoin code. It also capped the maximum number of coins to 21 million and employed the same algorithm of SHA-256. However, the coin about which people know more as the first altcoin is Litecoin which is still in circulation and currently is the 22nd most popular altcoin based on the market cap rank.
Today, the total number of altcoins in the crypto market is believed to be above 20,000. Almost every day, a new coin is circulated in the market. However, while a majority of them fail to make their presence felt and fizzle out soon after their launch, quite a few coins have withstood the test of time and established themselves as having the potential for being profitable assets.
Types of altcoins
As all cryptocurrencies are highly volatile leading to erratic and frequent fluctuations in their prices, there was a need for a coin that addressed this problem that the other coins faced. So, stablecoins were created. As the name suggests, they are relatively stable compared to other coins as their value is pegged to a fiat currency or a commodity.
- Payment tokens
They are designed to be used as a mode of payment in exchange for goods and services and are similar to the use of a currency that is used in a financial transaction between two parties.
- Security tokens
Assets in the stock market are converted into tokens of the same value that investors can invest in. These security tokens also hold a stable value in every circumstance and also do not get affected by exterior factors like that of inflation.
- Utility tokens
They have multiple utilities within a network such as payment of network fees, buying goods and services, and redeeming bonus points.
- Meme coins
They are a take-off on a meme and have gained prominence lately due to the hype created by Elon Musk’s support for dogecoin.
- Governance tokens
These token owners have certain privileges that enable them to authorize changes in their governance protocols.
The most popular altcoins today
- Binance coin
Altcoins are available at the crypto exchanges and crypto trading apps such as https://btcrevolution.io/ and are ideal for those investors wanting to diversify their portfolios.
Though Bitcoin has dominated the crypto market and no altcoin has seen the kind of success that has been witnessed in the case of Bitcoin, several altcoins are performing exceedingly well and are potentially profitable ventures for the investors.