Cryptocurrency is often associated with Bitcoin (BTC) as it is not only the first-generation cryptocurrency but also the largest by market capitalization.
Bitcoin has dominated the crypto market since it was launched in the year 2009.
But there are thousands of other cryptocurrencies present in the crypto market known as “altcoins.” An altcoin is an alternative cryptocurrency to Bitcoin.
Altcoins provide you with the opportunity to enter cryptocurrency even if one Bitcoin is out of your reach. You can buy some of the most popular altcoins such as Ethereum (ETH), Tether (USDT), USD Coin, and more.
Let us discuss in detail what altcoins are and what future they hold.
What is an Altcoin?
An altcoin can be defined as an alternative cryptocurrency to Bitcoin.
Altcoins have been introduced over time to make it possible for people to buy cryptocurrency who cannot afford Bitcoin and diversify their crypto portfolios.
Nowadays, experts put the estimated number of cryptocurrencies to be above 10,000.
Some altcoins, such as Ethereum, have grown in value over time and are now among the most expensive cryptocurrencies.
So, cryptocurrency is not all about Bitcoin as there are altcoins present as well.
Carl Runefelt, alias, The Moon, is a global crypto leader who is pushing for the mass adoption of cryptocurrency.
According to Carl, “We have seen altcoins rally very, very strongly in the last few months. I think we will continue to see that. The likely scenario is that we will continue to see altcoins rise before Bitcoin peaks.”
Evolution of Altcoins
Altcoins have evolved with time. There are several types of altcoins introduced into the crypto market based on their technical specifications.
The following are the most important types of altcoins:
Mining-based coins are the types of altcoins that are introduced by computer networks to solve complex mathematical problems.
These coins require a lot of energy to be mined.
Some of the most popular mining-based coins include Bitcoin, Monero, Ravencoin, and more.
Stablecoins can be defined as cryptocurrencies whose value is pegged to another asset. Most often, it is fiat or traditional currency such as the British Pound, the US Dollar, or the Japanese Yen.
But stablecoins can also be pegged to commodities like oil or gold.
The purpose behind the creation of stablecoins is to minimize the price fluctuation of cryptocurrency. They eliminate the volatility that is associated with cryptocurrency with a predictable value.
Stablecoins can also be used for transactions like fiat. The three main types of stablecoins include crypto-backed stablecoins, algorithmic stablecoins, and fiat-backed stablecoins.
Some of the popular stablecoins are Tether (USDT), Binance USD, Dai, and more.
Cryptocurrencies that have gained fame through social media are mostly known as memecoins.
They have a lottery-like aspect – increasing in price instantly and then falling sharply.
Memecoins include Shiba Inu, Dogecoin, and more.
Another form of altcoins is security tokens which represent a fractional interest in another asset.
For example, the ownership of a piece of art can be divided through security tokens. Likewise, security tokens can represent shares of a company.
Blockchain Capital BCAP, AspenCoin (ASPD), and SPiCE VC SPiCE are some of the security tokens.
Risks Associated with Altcoins
Altcoins have come a long way since their introduction into the crypto market.
But cryptocurrency is extremely volatile, and you need to take care of the following things when investing in altcoins:
- As sentiments play a key role in cryptocurrency, you should avoid being emotional when buying altcoins and base your investment on facts.
- Investors mostly invest in the most popular altcoins such as Ethereum. You should avoid investing in altcoins that are unpopular as this can cost you your money.
- You should avoid investing in altcoins more than you can easily afford to lose.
- Always diversify your investment in altcoins and never invest all your money in one altcoin as cryptocurrency is volatile.
- Keep your focus on the technical capacity of an altcoin. For example, altcoins such as Solana offers high functionality at a low cost.
What does the Future Hold for Altcoins?
There are many experts out there talking about the future of altcoins.
Fundamentally, you should never let yourself be misguided by any sentiments related to altcoins.
Since Bitcoin is becoming unaffordable with each passing day for many people around the globe, the popularity of altcoins is rising.
Altcoins solely rely on blockchain technology. It is expected that as long as blockchain technology exists, altcoins will remain in circulation. And blockchain technology is here to stay.
Carl Runefelt on his YouTube channel, The Moon, says, “I stick to altcoin projects that I believe in and are backed by strong projects.”
Altcoins are the way to enter the crypto market if you cannot afford a single Bitcoin. They serve different purposes and are believed to be still finding their role in the global economy.
Cryptocurrency has withstood the test of time and is becoming popular against fiat.
Altcoins have played an enormous role in the stability of the cryptocurrency. They are a remarkable way to earn money with cryptocurrency and are expected to play a significant role in future.