Altcoins are nearly identical to Bitcoin in every way except for one key difference: the use case. Altcoins often have their own unique properties and may serve different purposes than Bitcoin’s purpose as a peer-to-peer electronic cash system.
In this regard, Altcoins can be considered subcategories under the broader umbrella category of cryptocurrencies. You can find the best Altcoin wallets by Tezro here.
These assets are called “Altcoins” because most of them are alternatives to the original cryptocurrency, Bitcoin, and are also known as “Bitcoin clones.”
The First Altcoin was Called Namecoin
Namecoin is an Altcoin and a decentralized DNS system.
It was launched in April 2011, as the first Altcoin. Namecoin uses the Bitcoin protocol, but it has its own blockchain independent from bitcoin’s blockchain.
Namecoin was created by Vincent Durham, who wanted to create a cryptocurrency that could store information other than financial transactions on its network.
He also wanted to use the proof-of-work model used by Bitcoin (but not exclusively limited to financial transactions) because he felt that it could help secure Namecoins’ integrity and prevent spamming attacks against them.
As of January 2020, more than 5000 cryptocurrencies were being traded with a market cap of more than $200 billion. This number has increased over time as the first cryptocurrency was created in 2009.
The total market cap of all cryptocurrencies has been increasing steadily since that year, reaching $200 billion for the first time in June 2019 and crossing $300 billion in September 2020.
Is Bitcoin an Altcoin?
Bitcoin is the first cryptocurrency, and most of the Altcoins that followed it were created in its image. So, yes: you can think of Bitcoin as an Altcoin.
However, since Bitcoin is so prominent, it has held onto its place at the top of the cryptocurrency market. And because of this, many people regard it as the gold standard for digital assets.
While there are many different types of Altcoins out there), Bitcoin remains king among them — and as such, can be a hard sell for anyone looking to invest in an alternative digital currency.
But it should be noted that cryptocurrencies have exploded in popularity over the past few years. And because of this, Altcoins like Ethereum, Litecoin, and Dogecoin are all highly favored by various investors.
Suppose you want to buy or sell any other type of cryptocurrency besides Bitcoin (for example, Ethereum or Dash). In that case, you’ll usually do so through crypto exchange platforms like Coinbase or Kraken.
This means that even if you’re not interested in investing directly into these currencies yourself (as opposed to simply buying them on one platform with another), they still need your money!
Should you invest in Bitcoin or Altcoins?
Altcoin prices are more volatile, which means they can be more profitable. Altcoins often have shorter lifespans than Bitcoin, as there are many more Altcoins on the market.
If you’re considering investing in Altcoins for a longer-term strategy, it’s important to remember that their prices may rise and fall quickly.
For those looking for immediate profits — like most miners and traders — then investing in Altcoins is probably better for you.
Even though they’re more volatile than Bitcoin, their volatility allows them to make up for lost time by rising rapidly at times.
Closing Thoughts
Bitcoin is a digital cryptocurrency created as an alternative to fiat currencies. Altcoins are also referred to as “Bitcoin clones” since they have their characteristics and properties.
Altcoins don’t need to be based on or have any similarities with Bitcoins, as it’s pretty easy to replace Bitcoins with Altcoins. Still, it will take time since bitcoin has its unique properties and advantages over other cryptocurrencies.
