Most of us are familiar with Bitcoin as it is the most popular digital cryptocurrency. But you must not limit your knowledge by sticking to only one crypto coin, as there are many other digital currencies, which are known as ‘altcoins’ or you can say alternatives to Bitcoin. Though there are many altcoins, some of them include Ether, ZCash, Dash, Ripple and Monero. The successful venture of Bitcoin is the prime reason for the followup of these alternate cryptocurrencies. People generally prefer to use them as the best alternative to Bitcoin. But what makes these altcoins apart from Bitcoin?
In the latest altcoin breaking news, there came a report which stated the estimated fact about more than 5,000 cryptocurrencies in the early year 2020. In February 2020, altcoins were holding around 34% of the total cryptocurrency market. Ripple and Ethereum came out as leading altcoins according to market capitalization in the current year.
What Are Altcoins?
Before we focus on our main topic, which says what sets altcoin apart from Bitcoin, we need to understand about the altcoins. If you carefully notice the word Altcoin, you will observe the two separate words; one is ‘Alt’ and other ‘coins’. By observing the word Alt, you must have understood that the word indicates alternative. And the other word doesn’t need further explanation, as it is known by everyone and is used in daily life.
As mentioned above, altcoins came into being after the successful venture of Bitcoin, which became the first P2P (peer to peer) currency in the crypto world. Many altcoins have been attempting to come at par with Bitcoin or to target its perceived limitations, but for that, they need to feature competitive advantage to reach that goal.
To know about these altcoins, you need to understand that they are built on a framework given by Bitcoin. Besides, peer to peer feature, these altcoins provide cheap and organized ways to make transactions on the internet. Besides having overlapping features, altcoins differ from each other.
Different Categories Of Altcoins
With the evolution of altcoins, came distinct categories. These coins are categorized into four different coins, including security coins, stablecoins, mining-based coins and utility coins. Now let’s dive in to understand each altcoin.
These are those altcoins, which are most probably linked to the business. They are somewhat similar to traditional stocks, which promises with kind of dividends, including business ownership and payout.
Attempts have been made by stablecoins to improve on bitcoin with reduction of volatility. If you want to know about the most popular stablecoin, then it is Facebook’s ‘Libra’. It is possible, even though it is yet to be launched.
Coming on to another category of altcoins, which is utility coins, these coins give claim on services. These altcoins often get sold off, as being considered as part of ICO. To give any perfect example of a utility coin offered in ICO, then it is Filecoin. This altcoin can even be exchanged with decentralized file storage space.
So these are some examples, which makes altcoins apart from Bitcoin.
Why Bitcoin Triumphs Over Altcoins
The reason why altcoin could not match up to the level of Bitcoin is that their exchange rates are much volatile. These coins have still not maintained their value against Bitcoin, which resulted in the fall of some altcoin forever.
Altcoin can vary with Bitcoin in many different ways. These coins came into notice after the success of Bitcoin, which became a popular cryptocurrency. Things which sets altcoins apart from Bitcoin may vary in features and functioning. Some may consist of a unique economic model or a different method of coin distribution. But on the contrary, there are also other altcoins which don’t get fit into parameter due to some flaws. When it comes to practical analysis, altcoins cannot reach to the height of Bitcoin as they don’t offer much benefit and are riskier in comparison to the latter cryptocurrency.
Mining-based altcoins contain the mining process feature which generates new coins by finding the solution for unlocking blocks problems. Rather having similarity to other altcoins, it shares a similar feature with Bitcoin. If you have been watching the Crypto News, then you must be knowing about Ethereum being regarded as the best mining altcoin in February 2020.