This year, the cryptocurrency industry will celebrate its first anniversary. Bitcoin, the world’s #1 cryptocurrency will be exactly 10 years old In October. During this time, a large number of different coins have appeared on the market, which tried to improve or replace BTC. In this article we’ll talk about such a concept as altcoins, find out why we need them, when they were invented and what kind of future awaits for them.
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This concept is rather familiar to most of the experienced market participants. In fact, an altcoin is any cryptocurrency other than Bitcoin. It will make sense if you refer to the etymology of the word (altcoin – an alternative coin). Altcoin is not a specific coin, but implies a whole separate species, which already has a couple of thousand coins.
New altcoins are designed to replace, improve or supplement #1 cryptocurrency. It is worth noting that the vast majority of these projects have not been successful, but there are also quite successful cases. If you look at this in terms of the years passed, you can confidently state that the key to success is not to copy blindly BTC with minimal corrections, but to create truly original projects.
So, let’s analyze the main parameters of altcoins that differ them from Bitcoin:
– The speed of transactions. This is one of the weaknesses of the cryptocurrency flagship, since the network is designed to handle only seven transactions per second, so they can be delayed for two to three hours. Some developers have succeeded in creating altcoins with high network bandwidth and with the ability to scale the user base.
– Hashing algorithm. All cryptocurrencies are built on the technological base of blockchain. Coin systems need to hash transaction data and enclose them in blocks to work correctly. Bitcoin works on the SHA-256 algorithm, which takes about 10 minutes to generate one block. This is by no means the only algorithm, there are other, faster and more efficient ones, such as scrypt, X11, X13, X15, etc. They spend much less time creating a single block, which allows for greater transaction speed.
– Altcoin mining algorithm. The extraction of alternative coins often does not have any fundamental differences from Bitcoin mining. Since altcoins are less popular, they are mined by fewer participants, so the overall complexity of the network is smaller. Therefore, it is much more profitable to mine altcoins than to mine BTC. There are coins that are not available for mining, since the developers initially produced a full emission.
Each year there appear new interesting decentralized projects that collect impressive amounts at the ICO stages. Not only can they bring their depositors insanely big money, they can also change the development vector of the industry as a whole. For example, the same thing happened with Ethereum.
If we mark some specific promising altcoins at a given time, we should point out the following:
– Bitcoin Cash;
Almost all of them are in the TOP-10 of the global CoinMarketCap rating, but all these projects have not yet fully revealed the capabilities of their technologies, so they are still quite promising for investments.
Altcoin is not a definite coin, it is any cryptocurrency, except Bitcoin. Each of them was created as a counterweight, addition or replacement of BTC. Different projects solve various problems of the original blockchain. Many altcoins can have a great future, as some of them have every chance to outshine Bitcoin.
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