It all started in 2008 with the introduction of Bitcoins. The phenomenon of cryptocurrencies in recent years has never stopped and has seen, alongside the most famous virtual currency on a planetary level, the birth of many others, commonly called altcoins. In this article we tell you more about what they are and how they work.
Understand when it comes to Altcoin what they are is not difficult. In fact, the term refers to All cryptocurrencies with the exception of Bitcoin. From the point of view etymological consists of alt (alternative) and coin (coin), indicating all coins that are alternatives to Bitcoin.
It is used from the 2011 following the launch of a specific cryptocurrency: Namecoin. Its extension to all other cryptocurrencies different from the one born from the project behind which the ever-mysterious Satoshi Nakamoto (the creator of bitcoin, a name that sees a pseudonym never explicitly clarified) happened naturally.
Differences between altcoin
Do you know how many Altcoins present in circulation? Almost or about 10.000. A number that is experiencing steady growth and has within it multiple different currencies with specific and even competing peculiarities.
They still have a one common goal: that of making sure they surpass, both on their own and in their entirety, the fame and success Bitcoin has acquired over the years. The reason is simple: there are major financial and capital movements at stake.
How do they accomplish this? By optimizing and innovating what are the flaws and shortcomings of Bitcoins, something that is not difficult, the cryptocurrency world being newly introduced and in constant innovation given its inclusion in the Digital Revolution. In fact, altcoins are a necessary and even viable alternative to Bitcoins: many exhibit significantly superior performance. None has been able, however, to reach the first place in the market.
We have proposed to you for altcoins a definition. But what does their acquisition enable? Many things, from achieving savings to accessing interesting services, virtual but also offline.
Another question that comes up is which Altcoins are the most interesting and valuable for achieving the benefits of this new alternative financial system. We illustrate this in the next section.
Most important altcoins
Altcoins are indeed many. The most well-known and established ones are as follows:
- Ethereum. Introduced in 2015, it is characterized by functioning not so different from bitcoin but definitely more advanced. It features its own ad hoc platform and is extremely accepted as a means of payment. It is becoming particularly popular within the NFT, the Non-Fungible Tokens: unique and unrepeatable works of art of various designs, another successful trend related to cryptocurrencies.
- Litecoin. A digital currency that enables decentralized digital payments. Compared to Bitcoin, it ensures transactions more fast, decidedly cheap rates, as well as increased circulation at the monetary level. Introduced in 2011 by Charlie Lee proves to be more performant and reliable.
- Ripple. An ad hoc digital currency for payments, effective even with cross-border bank transfers in real time: that's why it is known as "bankers' currency."
- Tether and Stablecoin. These are particular altcoins, being linked to a stable element such as U.S. gold or gold. With the advantage of having significantly less volatility than other cryptocurrencies, including Bitcoin.
The list could go on and on, including, for example, Namecoin, the cryptocurrency that first emerged as an alternative to Bitcoin and the source of the question we posed for this in-depth look at altcoins and what they are. Let us now look at the pros and cons of these cryptocurrencies.
Altcoin: advantages and disadvantages
We start with the advantages of altcoins compared to bitcoins. The most relevant are:
- They ensure the ability to choose within a wide variety of financial solutions, allowing one to select the one that is convenient with respect to the investor's specific needs.
- They represent an evolution of Bitcoins and are designed from an innovative and even improving perspective.
- They have lower transaction costs in the face of strong competition within them.
- The conditions of most altcoins are in the sign of the transparency. It also adds value in terms of protecting a person's privacy and safety.
And the disadvantages? The downside of altcoins is mainly the large number in which they are declined: not surprisingly, very few of them manage to stand out and get noticed anyway.
For investors, therefore, they certainly represent an attractive product, provided they identify the features that actually make them more relevant to their specific needs. Only in this case do altcoins manage to perform at their best, bringing a performance superior to that of Bitcoins and capable of giving absolutely attractive results.