Alternative coins
Altcoins were created shortly after Bitcoin (BTC) and offer an alternative to the more established cryptocurrency. They account for almost 80% of the market and there are more than 10,000 now. Also, investing in altcoins has more risk and therefore more risk compared to traditional cryptocurrencies such as Bitcoin and Ethereum.
Altcoins offer users the opportunity to earn big returns, especially those who know how to make more profit from the altcoins they hold.
Altcoin is an abbreviation of alternative coin which means alternative currency. Altcoins are all currencies beyond Bitcoin including Litecoin ( LTC), Uniswap (UNI), Dogecoin (DOGE), Zcash (ZEC ), and Cardano (ADA).
Since Bitcoin’s founding in 2009, a plethora of cryptocurrencies have circulated in the cryptocurrency space, and more continue to come out every day. These alternatives began to stand out further from Bitcoin’s consensus mechanism by encompassing various combinations of privacy, features, and supply schedules.
The creation of altcoins offers various functions that makes them tempting and others more valuable compared to the original Bitcoin. Below we will look at some of the most common altcoins on the market.
Ethereum
Ethereum is the second largest coin after Bitcoin by market capitalization and is the largest altcoin. However, many investors no longer consider it an altcoin due to its potential and it is a more risk-adjusted investment than most altcoins and is close to Bitcoin.
In addition, Ethereum was the first blockchain to be launched with smart contracts, creating in turn the decentralized economy (DeFi). Ethereum is considered a money protocol compared to Bitcoin, which is mainly transactional.
Ethereum can also be used to lend, to borrow and others that cannot be realized in the first layer of Bitcoin. Then compared to Bitcoin, Ethereum acts as a ledger in which investors can create decentralized applications using their tokens.
Litecoin
Litecoin which is also called “digital silver” compared to Bitcoin which is considered the “digital gold” as it is a fork of the original Bitcoin. It comes with a different hashing algorithm (Scrypt) and has a faster block processing speed, which produces 4 times faster than Bitcoin.
Stellar
Unlike most cryptocurrencies, stellar focuses on international bank transfers. Stellar leverages distributed ledger technology (DLT) to exchange value across various limits and then exchanges the cryptocurrencies into fiat.
Ripple
Ripple (XRP) is a popular digital payment platform that houses cryptocurrencies. It is one of the best-known cryptocurrencies and uses a consensus mechanism that differs from Bitcoin’s traditional proof-of-work (PoW) mining process.
Uniswap
Uniswap is the first decentralized exchange (DEX) and exists on the Ethereum blockchain. Therefore, Uniswap uses the ERC-20 algorithm which is an Ethereum token. Since it is open source, it has created several copy competitors in the space, such as Sushiswap which is also located on Ethereum and PancakeSwap which is on the Binance chain.
Polka dots
Polkadot (DOT) is the creation of Gavin Wood, one of the co-founders of Ethereum. Polkadot is a promising blockchain because, like Cardano, much of it is based on peer-to-peer research. But instead of having a test network like Cardano, Polkadot first launches its experimental improvements to Kusama’s blockchain.
Where can I buy altcoins?
The emergence of numerous altcoins has led to a rise in the development of exchanges between Bitcoin and altcoins, increasing market activity. But most investors are still struggling over where to buy low-cap cryptocurrencies.
The term small cap refers to cryptocurrencies with a market capitalization of less than $1 billion. Cryptocurrencies with a larger market capitalization are safer to invest but the criterion for whether someone wants to invest in something that will bring them greater profits would be to look for low-cap altcoins.
Now many platforms allow traders to buy, hold and sell altcoins but the best exchange depends on several factors. However, each comes with different privacy policies.
Many users have suffered losses due to scams and problems that have been made on many exchanges with the intention of losing some or even all of the capital they have invested. For new investors it would be good to avoid lesser-known platforms and stay on reputable exchanges such as Kraken, Coinbase, Binance, KuCoin , eToro or crypto. com.
Before they can make a purchase user usually have to go through a KYC (Know Your Customer) process to gain access to cryptocurrencies and it is wise to check the trading fees so that you do not have to spend more money.