What are Altcoins?
Altcoins is coined from two words, ‘alt’ and ‘coins’ (in this context – cryptocurrencies). In other words, Altcoins are alternative cryptocurrencies launched after the success of the digital currency of Bitcoin.
In the cryptocurrency market, after Bitcoins, there has been emergence of other alternative to Bitcoins. These Altcoins have been developed from the same framework upon which Bitcoins were built. This involves a mining process and decentralization of money. Altcoins make use of their own block chains, miners and wallets.
Altcoins: an improvement from Bitcoins
Different types of cryptocurrencies have emerged after the development of Bitcoins.
This was the first altcoin developed as a fork after Bitcoins in 2011. From the very core, it was developed as a domain name registry server which is resistant to censorship. This is possible because they have their block chains which makes it possible for a private and safely protected internet security and reduction of censoring. Most DNS are owned by government agencies. The aim of the developers was to create a code so basic and similar to Bitcoins. Transactions made on Namecoins are currently irreversible. In the future, Namecoins will be used as a medium for online voting and Namecoin is able to store data within the blockchain database. In the month of March in 2018, Namecoin was said to have incurred loss. Nevertheless, Namecoin is still one of the most innovative altcoins eve developed.
It is a popular cryptocurrency that made appeal to people by using a different set of rules of mining from that of Bitcoin. Litecoin is a peer-to-peer internet currency that makes use of open market software strategy. Transactions are low cost, private, safe and borderless, in other words, no permissions are required and transactions can be carried out anytime and anywhere. Transactions made on Litecoin are four times faster than Bitcoins meaning that payment made on litecoins can be confirmed faster than bitcoins
The Litecoin blockchain is the largest global digital based network with hundred percent uptime. It has secured millions of dollars of value. Litecoin is the fifth largest cryptocurrency in the world amongst others and is fast rising with the value increasing in recent times.
Ethereum is an open source, public digital platform that runs smart contracts. This decentralized platform runs applications with standard security measures making it have no chance of fraud. The value of Ethereum has risen in recent times and Ethereum is also considered cryptocurrency.
Advantages of Altcoins
- Safety First: these altcoins have taken high level of precautions to enable their sites have heavily secured internet databases.
- Broad Market Coverage; Being an online platform that makes digital transaction possible, a large aspect of the market is covered anytime and anywhere.
- Cross platform function; most altcoins have platforms that enables the exchange between cryptocurrencies as well as exchange between fiat and cryptocurrencies.
Precautions to be taken when considering Altcoins
Anything that has an advantage will likely have a disadvantage, here are some loopholes to look out for when you consider investing in the market of cryptocurrency.
- Risk is involved: for every business there’s a risk involved. The fear of loss is to be expected.
- Beware of scam coins which are developed just to gain awareness and are certain to crash or crumble within a short period of time.
- Time factor: the time taken to wait for a transaction to take place especially when converting cryptocurrency to cash can be said to be a little while.
Other terms used in the guide to Cryptocurrency
Cryptocurrency is a digital currency modelled to serve as a medium of exchange for transactions of digital assets using cryptographic protocols in order to enable a safe and secure transaction.
Blockchains are public ledgers containing a list of records used for any transaction of digital data on cryptographic platforms. At the basic level, it is a chain of blocks (records) that are interlinked using cryptography.
Mining of altcoins in cryptocurrency
The mining of cryptocurrency brings about altcoins. The people who decide to act as developers of open software or makers of the new altcoins fast emerging are called miners. The process of solving complex mathematical problems is called cryptocurrency mining.
Other examples of altcoins in cryptocurrency
Other Altcoins not mentioned in the text above are Ripple, Stellar, amongst others.