Crypto.news provides complete cryptocurrency news coverage of the altcoin space, including prices, projects, and the latest developments. This includes Bitcoin, the world’s first cryptocurrency, as well as all other altcoins.
Altcoin is a shortened form for “alternative coin”. An altcoin is any cryptocurrency that isn’t Bitcoin. The first Altcoin to be launched was Namecoin. It was introduced in 2011 and was the only alternative to Bitcoin for a long time. Currently, Ethereum (ETH) is the most common altcoin.
As of November 2021, there are at least 14,000 cryptocurrencies that exist in the crypto market. While Bitcoin’s market cap takes up almost 50% of the total market cap of the crypto market, altcoins occupy the remaining market share. This percentage represents that a good amount of crypto users use Bitcoin more than altcoins at the moment.
Due to the fact that altcoins value are often derived from Bitcoin, altcoin price movements tend to imitate Bitcoin’s price trends. However, it is believed that as crypto currency ecosystems mature and as new markets are created for altcoins, the price movements for altcoins will become independent of Bitcoin’s price actions.
Altcoins serve a variety of purposes that differentiate them from Bitcoin and other cryptocurrencies, depending on the goals of the developers. For instance, either, the second-biggest cryptocurrency by market cap, is used to make payment for transaction costs in smart contracts on the Ethereum blockchain. Also, Stellar coin aims to provide faster, cheaper, and more energy-efficient transactions than its competitors.
Due to the unique utilities of altcoins, they have successfully created a market for themselves. This has attracted investors who see potential in them as alternatives to Bitcoin. These investors expect to profit as the altcoins increase in price.
There are several categories of altcoins that exist according to their utilities and consensus mechanisms. There are altcoins that are mining-based, pre-mined, meme coins, utility tokens, security tokens and stablecoins.
Mining-based altcoins are coins that are produced through mining. Most of them are mined using the proof of work (PoW) method which generates new coins by solving different problems to create blocks. Popular mining-based altcoins are Litecoin, Monero and ZCash.
Pre-mined altcoins are the exact opposite of mining-based coins. They are created through mining and are held by the team before being listed on crypto exchanges. Ripple’s XRP is an example of a pre-mined altcoin.
Security tokens are altcoins that promise reward in the form of ownership or a dividend payout to holders. An example of an altcoin that is a security token is tZERO.
Meme coins are cryptocurrencies inspired by jokes or memes on social media. The first altcoin to become a meme coin was Dogecoin. It was inspired by a popular Doge meme based on the Japanese Shiba Inu dog in 2013. Shiba Inu coin was introduced as a rival of Dogecoin in 2020.
Utility tokens are altcoins that provide services within a network such as purchasing services, paying network fees or claiming rewards.
Stablecoins are altcoins that reduce the volatility of crypto trading by pegging their value to either fiat currencies, precious metals or other cryptocurrencies. Common altcoins that are stablecoins are USDT, DAI and USDC.