Bitcoin is the first launched peer-to-peer digital currency in the cyrptocurrency world. Unlike traditional currencies we know of, being decentralized, fast and anonymous makes bitcoin more interesting and catchy in transaction processes. So it is for the market. As in every market is to be familiar with, BTC market is not let well enough alone. Bitcoin being so massive, necessitated the coining of the term ‘Altcoin’. So, what is an Altcoin?
Altcoin is the abbreviation for alternative coin (to bitcoin) or all blockchain projects that exist in addition to bitcoin. Since bitcoin mining has become extremely difficult in the recent years altcoins are under radar for most of the investors. Altcoin is clearly a broad term with thousands of them nowadays, however one should be familiar with some influential ones. Basically they are similar to Bitcoin in terms of being peer to peer, necessity to mine and offer efficient and winning transactions on the web.
As of 2019, some of the most popular altcoins are Ethereum, Ripple and Litecoin.
How to buy altcoins?
- You need to sign up for an exchange that allows you to trade dollars for coins such as Kraken, Coinbase etc.
- Sign up for a cryptocurrency-to-cryptocurrency exchange that will allow you to trade the altcoin you’re looking for.
- Obtain the coin you need for the trading pair on an exchange that allows you to purchase the coin in dollars and then send that coin to the exchange with the trading pair, and then buy the coin.
- Reverse the process to sell the coin.
Ripple and Ethereum is currently the runer-up to bitcoin. What makes Ethereum special is the promising capacity to monetize and trade pretty much anything.
Litecoin was designed in 2011 and works much like Bitcoin however the difference lies in the performance. Block generation rate is significantly higher. It’s gaining a lot of support, so you should keep an eye in Litecoin in the future.
Another altcoin, Dogecoin is quite similar to Litecoin, which in turn was again inspired by bitcoin. Distinguishing characteristic from Bitcoin is Dogecoin is an inflationary currency. In essence this means there’s no limit to how many Dogecoins can exist. This is not a common feature among other cryptocurrencies, so may boost Dogecoin above the rest in the future.
NameCoin is the first coin into implement merged mining and one of the oldest blockchain projects around. It does not aim to be a currency but a decentralized DNS. Namecoin project hasn’t been adopted enough yet but the development team is still active.
Relationship between Bitcoin and Altcoins
The main currency in cryptocurrency markets is Bitcoin. Alts tend to fund Bitcoin runs and Bitcoin tends to fund alt runs. Given this relationship the fluctuation in Bitcoin prices tend to effect altcoin prices. With BTC trading pairs on every exchange, the gravity of Bitcoin is really hard to escape. But then again this might a great change for price followers to have an idea what the entire market will do.