Currently, over 2,000 cryptocurrencies and digital tokens are being traded in the cryptocurrency system. Most cryptocurrencies excessively promise to revolutionize certain areas of trade, and some Altcoins even go so far as to claim that they are the best, updated version of Bitcoin. However, Bitcoin is unique and stands apart from all other altcoins.
In this article we will talk in more detail about altcoins, the history of their development in the crypto-community, volatility and rivalry with Bitcoin, as well as investments in altcoins.
Altcoin – an alternative to Bitcoin
The word "Altcoin" refers to any alternative Bitcoin coin. This category technically includes industrial giants (or "large altcoins"), such as Ethereum and Litecoin, but it is usually used to discuss new, smaller cryptocurrencies.
For example, some of the largest altcoins you may have heard about include: Ether, Ripple, Bitcoin Cash, Litecoin, and Monero.
Although not a single coin has yet threatened Bitcoin’s market share, there are already thousands of alternative virtual currencies and blockchain-based services. Many compete with Bitcoin directly, improving its functionality. Others use completely different mechanisms to support services or allow other applications to build on top of them.
Cryptocurrency is developing rapidly, but it is still in its infancy. This means that the current development moment is both risky and useful for researching new and innovative altcoins.
Altcoins are now comparable to securities. But no one can predict how individual coins will work in the future.
Better coins may eventually outperform Bitcoin, many others will fail or, even worse, serve as fronts for pyramid schemes. ICO (initial coin offerings), unlike IPO (initial public offering), is not regulated by any central authority. Although many ICOs are legal, since 2009, at least one hundred well-known ICO-pyramids/Ponzi schemes have also been known.
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For example, in 2017, altcoin, developed in Bulgaria, called OneCoin, attracted millions of dollars in investment, ahead of many successful modern ICOs. He was advertised as an alternative to Bitcoin, but in fact its only "blockchain" was a poorly designed Excel spreadsheet. However, the developers of OneCoin fell almost half a billion dollars before they were closed.
Altcoins see extreme volatility quite often: a coin can easily fail from $ 500 to $ 50, the next day after its purchase, or vice versa. The conclusion is that before buying any altcoin, you need to conduct a thorough research, and you should never invest in altcoins that you cannot afford to lose.
Many altcoins grew by a few thousand percent over the 2017-2018. It is possible that in 2019 there will be equally rapid elevations.
Of course, in any list there will be winners and losers, and altcoins, of course, very risky investments. However, it is also a time of exciting opportunities and innovations. Altcoins may be more affordable for new or small traders, since their lower cost also lowers the barrier to start.
They are also often the most advanced and innovative technologies, the smart strategy of altcoin is to diligently explore coins and invest only money that you can afford to lose.
Editor: Jerg Wos