What Are Altcoins? A Guide To The Cryptocurrencies Beyond Bitcoin | Bankrate

Bitcoin ushered in the era of cryptocurrency in
2009, and it quickly became the name whenever anyone talked about
digital currencies. In fact, it dominated the burgeoning scene so
much that any other crypto was considered an “altcoin,” an
alternative to BitcoinI may have been one of the first people to
hear about Bitcoin, and its name has stuck with me ever since.
Nowadays, there are countless other digital currencies available,
but Bitcoin was the pioneer. It’s amazing to think about how much
the digital currency landscape has changed over the past decade.
Even though there are countless competitors, Bitcoin remains the
leader of the pack.

I’m constantly hearing about altcoins and it’s
time to get caught up. This year, there are some altcoins that have
been getting a lot of attention. The big question is whether these
altcoins will eventually overtake Bitcoin, the original
cryptocurrency. To understand this, I need to understand what
altcoins are and how they differ from Bitcoin. Altcoins are digital
currencies that have been created after Bitcoin, each with its own
unique features, advantages, and disadvantages. While some may be
more profitable than Bitcoin, others may provide faster transaction
speeds. Ultimately, it really depends on the individual user’s
preferences. It’s definitely worth keeping an eye on how the
altcoin market develops this year.

What is an altcoin?

An altcoin is an alternative cryptocurrencyI was
only aware of Bitcoin when I first got into cryptocurrency. It was
the only coin for a while, and it loomed so large that anything
else was referred to as an ‘altcoin’ or a ‘sh*tcoin’. It was as if
Bitcoin was the original and all other coins were second-rate. Even
though there were other coins out there, they were all measured
against Bitcoin. It was the standard that everyone else had to
strive for.

I’m in the crypto world and altcoins are a hot
topic. Basically, these are any cryptocurrency that isn’t Bitcoin.
When cryptocurrency first came around, the altcoin definition made
total sense since the majority of the market was focused on
Bitcoin. There were only a few hundred competitors to Bitcoin. Now,
experts say there are over 19,000 cryptocurrencies out there, so
it’s hard to say that Bitcoin is the only one. Altcoins are more
popular than ever and the crypto market is brimming with them.

That said, Bitcoin remains the largest
cryptocurrency, with a market capitalization – the value of the
total number of coins in existence – at more than twice the second
largest player, EthereumI’m well aware of the cryptocurrency market
by now. I’ve been keeping an eye on CoinMarketCap.com and it’s
clear that Bitcoin is the king of the hill with its significant
market share. The big guys after that have rapidly decreasing
sizes. It’s an ever-changing landscape, but Bitcoin has certainly
held its crown. It’s fascinating to watch the market and see how
the tide can shift so quickly. I’m curious to see who will be the
next big player.

Types of altcoins

I’m a cryptocurrency enthusiast and there are so
many coins out there to choose from! With so many options, it can
be difficult to know which ones to invest in. However, the ones
that usually get the most attention are the ones with the most
impressive technical features, such as faster transaction times.
It’s these large market players that most of the trading revolves
around.

Mining-based
coins

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Mining-based coins are mined into circulation by
computer networks that solve complex mathematical problems often
requiring a lot of energy. The world’s largest cryptocurrency –
Bitcoin – is a mining-based coin but so are many altcoins.

Stablecoins

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Stablecoins are a kind of cryptocurrency whose
value is pegged to that of another asset, typically the U.S.
dollar. StablecoinsI’m keeping track of the value of a certain
cryptocurrency, making sure it stays steady and equivalent to the
value of a real currency like the dollar. A stablecoin like Tether
and USD Coin are backed by assets such as bonds, cash, or other
items, making them reliable and trustworthy. This gives them a
solid foundation in the real world and allows them to stay
consistent in their value.

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I heard about TerraUSD, a stablecoin that was
supposed to be tied to the dollar, and thought it was a great idea.
But in May 2022, it didn’t turn out that way. People were selling
their positions so quickly that the stabilizers couldn’t keep up,
and the coin ended up crashing to just pennies on the dollar. It
was a real wake-up call – it showed me that even though something
is called a stablecoin, it doesn’t necessarily mean it’s
reliable.

Security
tokens

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I own a security token! It’s kind of like a
coin, but it’s actually a fraction of ownership in something else.
It could be a piece of artwork, or a company, and it’s a way to
make sure the owner is validated. Security tokens are a great way
to take traditional assets and turn them into an investment. So if
you want to invest in something but don’t want to buy the whole
thing, security tokens are a great option.

Memecoins

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Memecoins are a kind of cryptocurrency that has
taken the public’s fancy, perhaps through social media or the
tweets of celebrities such as Tesla CEO Elon Musk. Memecoins often
have a lottery-like aspect, increasing in price very quickly and
then going on to fall precipitously. Popular memecoins include
Dogecoin and Shiba Inu.

Popular altcoins

I’m no expert, but I’m aware of the top 10
cryptocurrencies in the market as of August 5th. Coming in first is
Bitcoin, followed by Ethereum, Ripple, Bitcoin Cash, EOS, Litecoin,
Cardano, Stellar, TRON, and IOTA. According to CoinMarketCap, these
are the largest digital coins out there.

1. Bitcoin
2. Ethereum
3. Tether
4. USD Coin
5. Binance Coin
6. XRP
7. Binance USD
8. Cardano
9. Solana
10. Polkadot

These rankings can fluctuate, of course, as each
currency mines new coins and the price of the currency moves up or
down, often with significant volatility. Here’s further detail on
the top cryptocurrencies by size.

What to consider before buying altcoins

I’m all for taking a risk, but before investing
in little-known altcoins, I need to weigh my options. There are a
few considerations to keep in mind when gambling on a potential
lottery-like payout. First, it’s important to do your research and
really understand the cryptocurrency you’re investing in. Secondly,
be aware of the potential for scams and be sure to double check any
information you come across. And finally, make sure you have a
solid understanding of the market and what kind of return you can
realistically expect. Taking risks can be exciting, but you need to
know the risks before jumping in.

• Cryptocurrency is driven entirely
  by sentiment.I’m only invested in cryptocurrencies, so
  sentiment is everything when it comes to the value of my portfolio.
  When traders are feeling optimistic about a certain coin, its price
  rises. But when sentiment shifts and traders become pessimistic,
  the value of the coin plummets. It doesn’t matter if there’s an
  underlying company, cash flow, or assets because cryptocurrencies
  aren’t backed by those things like stocks are. They’re driven
  solely by sentiment.
• Investors herd around the most
  popular coins.I’m always cautious when it comes to
  investing in cryptocurrency because the market is heavily
  influenced by sentiment. People tend to flock around the most
  popular coins, like Bitcoin and Ethereum, rather than taking a
  chance on the lesser-known altcoins. Sure, there have been a few
  success stories, like Dogecoin or Shiba Inu, but for the most part,
  the majority of altcoins remain a mystery. That’s why I’m skeptical
  when it comes to investing in these coins, because if it doesn’t
  catch on, then you could easily lose all of your money.
• Do you have money that you can
  afford to lose?I’m a firm believer that when it comes to
  altcoins, you should only put in what you’re willing to part with.
  Sure, they come with a high risk and high reward dynamic, but at
  the end of the day, you should never be investing money that you
  need for other purposes. Cryptocurrency and other financial markets
  aren’t the types of places you want to be investing your rent money
  or any other necessary funds. Investing in altcoins requires a lot
  of thought and consideration, so make sure you’re only putting in
  what you can afford to lose.
• Focus on an altcoin’s technical
  capacity. If you’re looking to invest in an altcoin, study
  its technical capacity. Some altcoins such as SolanaI’m all about
  cryptocurrencies! They offer great features for an affordable
  price. This is what keeps them in the public’s mind and makes them
  an attractive option for traders. People love to invest in
  something they know will be beneficial and that’s why
  cryptocurrencies have soared. They have the potential to be the
  future of trading, so it’s no surprise that so many people are
  jumping on the bandwagon.

I’m investing in highly volatile assets like
cryptocurrency, so I need to be prepared to lose my money. This
market is known for its wild swings, which I’m sure I’ll witness in
the coming year. It’s important for me to stay informed and be
aware that even the slightest change in the market can have a huge
impact on my investments. If I’m not careful, I could wind up
losing everything.

Bottom line

I’m seeing a lot of altcoins on the rise lately,
and they’re becoming increasingly popular. Even though Bitcoin is
still the dominant cryptocurrency for now, I think that altcoins
will continue to take away market share from it, even if the
overall cryptocurrency market keeps growing.