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What Are Altcoins And Why Should You Care?

What are altcoins?

What are altcoins?

Altcoins are cryptocurrencies that are not Bitcoin. Altcoins can either be created by forking Bitcoin‘s code, or by taking the concepts behind Bitcoin and applying them to another blockchain. For example, Litecoin is a fork of Bitcoin, with the main difference being the block time (2.5 minutes) and the hashing algorithm (Scrypt instead of SHA256). There are many other altcoins, all with different features and use cases.

Why Are They Important?

One of the key features of all cryptocurrencies is the idea of decentralisation. The ability for anyone with an internet connection to send and receive money without the need for a middleman. Bitcoin is by far the most popular cryptocurrency, but it is not the only one. Other altcoins are important because of the role they play in crypto communities. For example, Litecoin is seen by many as the silver to Bitcoin’s gold, with its lower price and higher liquidity making it a useful tool for everyday transactions. Ethereum is another example of an altcoin that has gained a lot of attention over the past 12 months, with the ICO market taking off thanks to people being able to fund their projects with ease.

What Makes An Altcoin Successful?

The success of an altcoin will usually depend on the size of the community behind it. The cryptocurrency with the largest community is Bitcoin, with its network effect being so strong that no other coin has come close to taking the top spot. However, some altcoins have had a significant impact on the market, with Litecoin being one of the best examples. Litecoin was created in 2011 as a fork of Bitcoin, and has gone on to become one of the most traded cryptocurrencies on the market. The popularity of Litecoin has led to the network being used to test out new technologies before they‘re applied to Bitcoin, with SegWit and the Lightning Network being two good examples. Similarly, Ethereum has gone from strength to strength in 2017 and is currently the second most popular cryptocurrency on the market. The success of Ethereum has been down to the fact that it has allowed people to create their own cryptocurrencies and build their own products and services on top of the network. The ICO market is one of the best examples of this, with ICOs raising billions of dollars in 2017 and allowing people to invest in new cryptocurrency projects. As cryptocurrencies have gained in popularity, more and more altcoins have been created.

Generally, they project themselves as better substitutes to Bitcoin. The success of Bitcoin as the first peertopeer digital currency paved the way for many to follow. Many altcoins are trying to target any perceived limitations that Bitcoin has and come up with newer versions with competitive advantages. As of now, there are over 800 altcoins in the market and its very likely that more will be added in the future. Usually, altcoins are the new kids on the block and have a smaller user base than Bitcoin. Most altcoins have been created with a focus on a specific niche, with most of them overlapping with Bitcoin in terms of functionality. The most notable exception, however, is Ethereum. Ethereum was developed with a focus on smart contracts, and has become a popular platform for several cryptocurrencies. How is it different from Bitcoin? As we established in the previous section, most altcoins are very similar to Bitcoin. Its only normal to assume that they will follow the trend of Bitcoin and get mined using the same protocol. However, this is not the case. There are two major differences between the two technologies that make all the difference in the world: Blockchain: While Bitcoin and most altcoins use the same general blockchain protocol, they differ in the parameters. For example, the block time in Bitcoin is 10 minutes, while in Litecoin it is 2.5 minutes. While Bitcoin and most altcoins use the same general blockchain protocol, they differ in the parameters. For example, the block time in Bitcoin is 10 minutes, while in Litecoin it is 2.5 minutes. Algorithm: The biggest difference of them all is the algorithm used. While Bitcoin uses the SHA256 algorithm, many altcoins use Scrypt or SHA3. Apart from that, some other altcoins use entirely different algorithms like Groestl or X11.

Why You Should Care About Altcoins

Blockchain technology is the next big thing to hit the world. Its already being used in many different ways to change the world. The use of cryptocurrency is not limited to just being spent on goods and services. Cryptocurrency can be used to invest in other cryptocurrencies or blockchain projects. These are known as altcoins. The altcoin market is a very important part of the cryptocurrency ecosystem. It helps to evolve blockchain technology, exploring new ways to use it. It also helps to support new blockchain projects, helping them to get off the ground. Its important to know that the altcoin market is not just about making money. Its about innovation.

How Many Cryptocurrencies Are There?

There are more and more altcoins/ cryptocurrencies being created every day. How many cryptocurrencies are there? At the time of writing, there are over 6,000 different cryptocurrencies on the market. But, while there are many different altcoins, there are only a few that are actually worth investing in. There are hundreds of cryptocurrencies out there. But most of them arent worth investing in. Most of them are going to fail. This is because most altcoins are created with new technology. This makes it very difficult to create a new cryptocurrency that works. This is because theres a lot of complicated code that needs to be written. Most of these altcoins are going to fail because they arent going to be able to get off the ground. They arent going to be able to develop new technology or attract users. But there are a number of altcoins out there that are worth investing in.

Conclusion

There are new altcoins coming into the market everyday. Invezo will help you stay on track of altcoins. You will gain a perspective on the crypto market unlike any other platform.