The word altcoin comprises two words that are ‘alternative’ and ‘coin’. Here alternative comes in contrast to the most famous crypto coin bitcoin. So, altcoin means, all the coins other than bitcoin. Additional details https://btcrevolution.io/
Now, why the other coins are being differentiated from bitcoin? Some causes are there. Bitcoin is the first coin that started the era of cryptocurrency, or in another way, it is the innovation that introduced the whole idea of cryptocurrency to the world.
And, second one is it is the most valuable, rapidly grown-up, and the most popular cryptocurrency in the world. Among all the popular forms of cryptocurrencies, Bitcoin is known to be the most popular one. When it comes to Bitcoins, it can never be comparedother coins.
After bitcoin, more than 18,000 cryptocurrencies are introduced. Ethereum is one crypto that has shown some good performance for several years. Due to this reason, sometimes Ethereum is also excluded from the list of altcoins and counted after bitcoin as per popularity.
Different types of altcoins: Altcoins are categorized into different forms with different utilizations. They are-
As the name suggests, stablecoins are stable in terms of prices. Their prices are backed by fiat currencies or commodities so, the prices are defined by those prices and don’t change a lot. You can say that stablecoins don’t have as high volatility as bitcoin. These coins are good for new investors to trade safely with minimum risk. However, the profit is also low here.
- Payment tokens:
Payment tokens are used for payment purposes between two parties. You can use these altcoins to exchange values with other users.
- Security tokens:
There altcoins are crypto tokens that have the value of any asset tokenized in them. The asset can be anything like a stock, share, bond, or real estate. The value of these assets is tokenized and then the tokens are released to make them available for the investors. Investors buy these tokens to invest or utilize. The tokens must be secured and hold so that they can provide ultimate utility.
- Utility tokens:
These tokens or altcoins are used for utility purposes. You can use these to pay for any service taken in any network or to give fees for the network.
- Meme coins:
Meme coins, as the name indicates, are made having a sense of joke or silliness. You can take the example of the first and the most popular meme coin, Dogecoin. However, these coins sometimes have better performance than bitcoin such as Dogecoin can complete transactions faster than bitcoin.
- Governance tokens:
Governance tokens provide you with some sort of governing power on the platform that you are using. Suppose you buy a coin, and now you have the power to vote for any decision or protocol that has to be taken or changed in that respective network.
Pros of altcoin:
The main positive thing about altcoins is they are updated versions of regular cryptocurrencies such as bitcoin. Take the example of bitcoin cash. It is an altcoin that is created as a forked network with the help of the main bitcoin network. As a result, these altcoins are a better performer in many cases as well as potentially long lasting in the market.
Cons of altcoins:
- The main disadvantage of altcoins is they are not as valued, popular, and liquid as bitcoin. Though altcoins are being famous recently bitcoin still captures most of the market cap of the crypto market.
- Altcoins are not highly preferred by investors as well as companies for payment purposes. In investment, these coins are mainly used to diversify the bitcoin portfolio.
- Altcoins are not well categorized or distinguished by their roles. Defining the various roles of different altcoins is difficult. So, understanding them is also difficult.
Conclusion: Nowadays, altcoins are used for trading by so many investors. You can see that there is a sudden growth in several altcoins from a few years back. So, they are becoming popular little by little. Most of them are used to diversify a bitcoin portfolio. You can also buy some in http://bitcoin-prime.app/nl/platform. As altcoins are expected to have a better future investing in them now can be a good decision.