Altcoins are cryptocurrencies that don’t follow the same structure as Bitcoin, Ether or Litecoin. These coins differ in that they are not created by a mining company but rather by an individual or group of people who decide what the coin will look like. It is this ability to actually change the design of the coin that separates these types of coins from the rest.
Simply stated, a cryptocurrency is a virtual currency that exists as an alternative to traditional currencies. Since Bitcoins and Altcoins are both virtual currencies, they are often referred to as crypto-currency.
Commonly known as Bitcoins, Altcoins are not anonymous or pseudonymous. While many feature some level of privacy, that does not guarantee total anonymity.
Hence, Altcoins can be used to send and receive funds over the internet. It can also be used to pay for goods and services, purchase items and services and so on.
Why should I start using altcoins?
Altcoins represent a small but growing amount of the total cryptocurrency market cap. It is also the coins created by programmers that are more interesting, and therefore more useful than the coins created by miners. Altcoins are different from cryptocurrencies in the fact that you can actually change the cryptocurrency’s algorithm. This opens up the possibility of cheaper, more secure transactions.
The larger the userbase, the more serious the project is and the more likely the price will go up.
What Altcoins are out there?
There are currently six cryptocurrencies in existence:
Altcoins that follow the original design of Bitcoin (BTC).
Altcoins that were created by other developers.
Altcoins created by well-known developers that have sold their coins.
Altcoins that were created by good intentions but do not have a high probability of success.
If you’re interested in learning more, I recommend spending a few minutes watching Satoshi’s Bitcoin: The Future of Money.
Here is a list of some popular altcoins:
Alot of coins have a hard time making a significant impact on the cryptocurrency markets. This is because the ICO (initial coin offering) process is extremely easy, opening up a large number of coins for investment. As a result, there are a lot of altcoins out there that look like great ideas but haven’t had the time to mature.
The coin creation process
The beginning of a new coin is very different from the creation of Bitcoin. Developers must work together with a great deal of communication and teamwork.
Initial coin offerings (ICOs)
One of the major advantages of altcoins is that they can raise money faster than Bitcoin or Ethereum.
Most altcoins have an ICO. This means that there is a “funding period” of time that a coin is available for, during which it will be sold to investors.
While these coins are all cryptocurrencies, they differ in that they are all designed by a team of developers. In an ICO, the coin is created and only developers can sell their coins.
Tokens are the cryptocurrency equivalent of stock certificates. You get these in exchange for an altcoin (or Bitcoin or Ether). They represent ownership of a certain amount of the overall coin’s supply.