What are the Altcoins?
Bitcoin and its blockchain technology are already a trend. This new market, the cryptocurrency one, has been the headline during the past few years. The first digital coin is the Bitcoin and when it was launched in 2008 it introduced an entirely new paradigm. In the years following, there were hundreds of other coins introduced that often referred to as “altcoins” or an alternative to Bitcoin. They are known as substitutes because, to some extent, each altcoin is trying to replace or improve on the Bitcoin’s technology.
Altcoins represent the recent development of the cryptosphere and are an intriguing topic of the cryptocurrency environment. The main differences between different digital currencies are transactions speed, distribution method or hashing algorithm. Bitcoin’s success as the first peer-to-peer cryptocurrency paved the way for most of the coins that followed. Yet, most of the altcoins are peer-to-peer, involve a mining process and offer an inexpensive and swift way to carry online transactions. Altcoins have different proof-of-work algorithms and application improvements to increase user privacy.
Altcoins purpose is also to fill in the gaps where Bitcoin did not. Often these digital coins apply the idea of blockchain to tackle real-life issues and bring a positive contribution to society. Below we will discuss the 5 most popular altcoins and their contribution to the crypto space.
Ether is the cryptocurrency created by the Ethereum platform and blockchain. The technology behind it facilitates other companies to build on its digital structure. The platform is designed to program a binding agreement, or smart contracts, into the blockchain. The platform is becoming increasingly popular as businesses can build applications and use it in a more than transactional way. The New York Times defined Ethereum as “a single shared computer that is run by the network of users and on which resources are parceled out and paid for by Ether.”
Litecoin is the invention of the former Google engineer, Charles Lee. Its purpose is to improve on the transactional speed of the Bitcoin. Litecoin can generate a new block much swifter in comparison to the popular cryptocurrency.
Ripple is a Google-backed altcoin which attracted lots of capital and attention when it was launched. Not only it raised $90 million in funding, but its uniqueness makes it appealing to everyone – users can transact with fiat money to frequent flier miles.
Dash is regarded as the internet’s cash-in-hand due to its instant transactions and it definitely sets out a serious competition for Bitcoin, whose transaction speed often needs more than an hour.
NEM is a particularly interesting altcoin due to two reasons. One is its vast adoption in Japan, hence a surge in value. Second is the “harvesting” process which is similar to Bitcoin’s mining, yet more people can profit from a generated block.
In the end, all altcoins are here to introduce a new digital era of transactions and thinking without any institution watching and governing. Blockchain technology is adopted by many businesses and projects aiming at introducing different monetary policies which can largely make altcoins potential participants of the global financial system. At the same time, altcoins can be a good investment for passionate investors or traders who believe in innovative projects.
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