Okay, so you’ve heard about Bitcoin, but when asked about Altcoins, you are left with a puzzled look on your face. Don’t fret, because we will give you a quick rundown so that you can familiarize yourself with this digital currency.
Besides Bitcoin, which has experienced an amazing growth in its price during 2017, there is a whole host of digital currencies out there. In fact, many hundreds of them. They are collectively referred to as Altcoins or put differently alternatives to Bitcoin. Such cryptocurrencies as Riple, Litecoin, Ethereum, and Monero are all a part of this category. These altcoins are different from Bitcoin in many different ways. Some start off with a different method of distribution and are passed on to every citizen of a particular country. Some other altcoins use proof of work protocols that differ from Bitcoin in an effort to avoid being the target of special mining equipment. Some are even structured so as not to use a proof of work algorithm at all.
More than one Altcoin have a better basis for developers to program new applications, and others give their users a higher level of anonymity. Moreover, there are digital currencies that fall into the Altcoin category which were made to serve a particular use that isn’t monetary.This abundance of altcoins has also produced some that aren’t suited to do anything interesting at all. Most of these coins are just slightly different or have a selling point that isn’t useful when you take a closer look. For instance, when creators modify their cryptocurrencies to have a larger amount of them, every coin will have a smaller value as a result. Slight tweaks could also mean that an altcoin is easier to mine, but then again transactions need to go through a higher number of confirmations while offering the same security level.
To be honest, many of the altcoins out there aren’t better than Bitcoin. What’s more, there are fewer programmers working to develop them and their usefulness can’t be compared to Bitcoin’s because they have a smaller user base. Even though most altcoins come with promises of convenient features, it usually turns out that they are only promises.
When you take all of this into consideration, most altcoins end up being more of a risk than investing in Bitcoin. They suffer from sudden spikes in their exchange rates and their track record doesn’t instill confidence. Many of them fail to maintain their price when compared to Bitcoin. Most come and go to never return. To make matters worse, they can be a clear scam with an aim to make their developers rich and perhaps the first investors. There are a few notable altcoins deliver on their promises and help with specific tasks. For example, providing users with more anonymity or developers with a way to test applications they want to use on the Bitcoin network. The future of these Altcoins is bright, but most alternatives are run by pure speculation or have even worse problems.
The take away from this is to perform the adequate research before you choose which cryptocurrency you want to work with.