What is an Altcoin?

While the crypto community stands united on its long-term bullish outlook for Bitcoin, the temptation of selling coins for short-term profits is built into the crypto zeitgeist. The crypto community created the term “hodl” in an effort to encourage people to hold on to their crypto assets for the long term. “Hodl” means “hold on for dear life,” and to resist the impulse of selling when the value of their crypto drops or rises. To understand how altcoins work, it’s good to first understand how blockchain technology works — which is where all cryptocurrencies operate.

So, if anyone can create altcoins or fork the Bitcoin blockchain, what causes them to have any value instead of them falling flat and being ignored? Like with Bitcoin and everything else in life, altcoins merely have the value people place on them. Bitcoin is a cryptocurrency, but, technically, it’s a few other things. It’s software that people run (Bitcoin Core), and an underlying blockchain that keeps track of who has which Bitcoins. With literally thousands of them in existence, altcoins continue to gain in popularity.

Today’s Cryptocurrency Prices by Market Cap

DApps are built on the Ethereum blockchain and their advantage is that computation is decentralised. Developers are charged in Ether for using the computing power in the network. No single institution angular 2 pipe vs angular 1 filter or authority is controlling the Ethereum network and essential components are distributed. Thus, it is almost impossible to attack the network, which offers customers the enhanced experience of reliable and secure applications. Please note that the availability of the products and services on the Crypto.com App is subject to jurisdictional limitations.

• On a lighter note, there have been lots of cryptocurrencies that were built with the intention to basically make fun of Bitcoin.
• But perhaps the most popular use for them today is in decentralized finance, or DeFi.
• According to CoinMarketCap data, there are over 17,000 altcoins in circulation as of February 2022, with more being created all the time.
• Another example is the Uniswap platform, a decentralized exchange built on top of the Ethereum system.

Moving Forward: The Future of Altcoins

The total crypto market volume over the last 24 hours is $214.34B, which makes a 1.00% increase. The total volume in DeFi is currently $16.08B, 7.50% of the total crypto market 24-hour volume. The volume of all stable coins is now $191.35B, which is 89.27% of the total crypto market 24-hour volume. What sets Ethereum apart from Bitcoin and other altcoins (back then) is that its blockchain design was more flexible and built like a software platform.

Why Do People Keep Creating Altcoins?

You should consider investing in altcoins if you’re going to make crypto part of your portfolio and you have time to spend researching them. Some altcoins are ambitious projects that offer more use cases than Bitcoin, which is primarily used as a store of value. Since altcoins aren’t as well-known, they could see what are smart contracts larger price increases if they catch on. One of the first-generation altcoins made in 2011, Litecoin is a cryptocurrency based off of Bitcoin. Uniswap uses an automated market maker protocol that executes trades according to a series of smart contracts. The smart contracts automate price discovery, allowing users to swap one token for another without an intermediary.

This also means that Bitcoin has more of a track record, which may be more appealing to long-term investors who may see newer altcoins as a riskier investment. That said, because altcoins aim to be more advanced than Bitcoin, they may be the preferable option for some. Because there are so many altcoins, they vary wildly in price, function and potential investment value. They range from established products to obscure projects that were never meant to be taken seriously. Altcoins are a class of cryptocurrency that refers to everything other than Bitcoin.

As the market matures and consolidates, it is essential for traders to stay informed and adapt to shifting trends and opportunities. Altcoins have come a long way since 2011, and continue to prove themselves as more than just an “alternative to Bitcoin.” The crypto space is a fast-moving and increasingly popular point of interest for investors. Thanks to the innovation and integration of crypto into mainstream business, people can safely and legally buy altcoins on their phones or computer.

If there is a purpose for the blockchain and token, it might be worth watching—if not, consider other coins or investments. If you’re unsure, talk to a financial advisor familiar with cryptocurrencies to help you decide if they are suitable for your portfolio. Local banks were also issuing currency, sometimes backed by fictitious reserves. That diversity of currencies and financial instruments parallels the current situation in altcoin markets. There are thousands of altcoins available in the markets today, each claiming to serve a different purpose and market.

Others are used as a sort of internal currency within a blockchain network. Stablecoins are cryptocurrencies whose value is “pegged” to another asset, typically U.S. dollars. Stablecoins maintain their peg in a variety of ways, usually involving cryptocurrency payment gateway for merchants holding a reserve of dollars and other assets equivalent to the amount of the stablecoin in circulation. Examples of stablecoins include USD Coin (USDC) and Binance Dollar (BUSD). Utility tokensUtility tokens provide a user with access to a service. For example, owners of a Filecoin token can spend the cryptocurrency to gain access to the Filecoin network, a decentralised, peer-to-peer network that stores files online.

Governance tokens give holders voting rights to help shape the future of a project or network. These tokens allow users to create and vote on proposals related to the cryptocurrency, contributing to its decentralised nature and ensuring that decisions are not made by a single central authority. As the world of cryptocurrency continues to evolve, new digital assets, known as ‘altcoins’, are making their mark.