As the world becomes more and more digital, cryptocurrencies are becoming more popular, especially among younger generations, like Gen Z or millennials. Surveys show that younger people are far more likely to invest in cryptocurrency than take any other, more traditional investment path. Adults are also becoming more aware of digital currency, as it has been shown that the percentage of adults willing to invest in bitcoin has been steadily increasing all around the world, with the number expected to rise further in the coming future.
Among cryptocurrencies, the undisputed champion is of course Bitcoin. Being the oldest, most popular, and most profitable, it is no surprise at all that Bitcoin retains its spot at the top of the crypto pyramid. Still, bitcoin is not the only cryptocurrency, and in fact, in recent years, a number of cryptocurrencies have sprouted that newer investors are starting to look into, some even preferable to Bitcoin. These alternatives to bitcoin are promptly named altcoins, and in this article we will take a look at just what they are, how you can trade them, and how viable they are for investors.
What is an Altcoin
To put it quite simple, an altcoin is any cryptocurrency that isn’t bitcoin. They work just like the original bitcoin did, by using private keys, one can send a payment from one digital wallet, to another. Transactions, as with bitcoin, are recorded by a blockchain, to prevent altering or denying transactions.
Much like bitcoins, alternative coins can be traded on most trading apps and sites. Aside from bitcoin, most of the best crypto exchange Australia sites support many different altcoins, like Ethereum, Litecoin, Ripple, Elrond, etc. Trading sites provide users with an accessible interface, and many investing tutorials which help new, inexperienced investors get the biggest return on their profits.
So, now that we have familiarized ourselves with what altcoins are, let’s take a look at the most popular and profitable alternatives to bitcoin.
The most popular altcoin, and the most profitable is Ethereum, currently ranked as the second best cryptocurrency on the market, after Bitcoin. Ethereum was first launched in 2015, with a supply of 72 million coins to start with. The creator of ethereum, Vitalik Buterin, chose the name Ethereum, based on a fictional element from an old science fiction book, claiming it was the name that sounded coolest, and he also liked that it contained the word “ether”, a debunked theory on light propagation.
In the half-a-decade since its existence, Ethereum has risen past its competition and established itself as a respectable cryptocurrency, with a bright future. Currently, Ethereum’s price is sitting at over two thousand dollars, having had a drastic price increase in early 2020. Many experts predict a bright future for Ethereum, claiming that the price may be able to reach $10.000 by the end of the decade, a record high for the altcoin.
For those intimidated by the instability of cryptocurrency, Tether might just be the perfect choice. Perhaps you’ve heard the term “stablecoin” floating around crypto circles. What this refers to is a cryptocurrency whose value is tied either to a FIAT currency or some other valuable (gold, silver, etc.). In the face of Tether, its value is tied to the U.S. dollar. Meaning that a single Tether is likely going to be worth $1.
Tether is hosted on the Ethereum and Bitcoin blockchain, and was first released in 2012. Since then, the value of the coin has grown quite monumentally. On the current market, Tether’s market cap has exceeded all expectations to reach a total of $80 billion. Not to mention, in 2019, Tether surpassed even Bitcoin in trading volume, being the most highly traded cryptocurrency, both daily and monthly.
There are many other alternatives to Bitcoin currently permeating the crypto market, however not all are viable or profitable. Other than Ethereum and Tether the best altcoins to keep an eye out for are Litecoin, one of the most successful altcoins today, as well as Ripple, which is also climbing the ladder to the top, Monero, Dash, Elrond, etc.
What’s important to keep in mind, is that altcoins are different from hard forks. Whereas hard forks are splits within a blockchain, altcoins provide an entirely new blockchain, and are controlled by an entirely different ledger. So whereas the cryptocurrencies previously mentioned are considered altcoins, stuff like Bitcoin Cash and Bitcoin Gold are hard forks of Bitcoin itself.
Why We Need Altcoins
And while Bitcoin is undoubtedly the most market-proven cryptocurrency, many of the altcoins that have spawned in the past decade offer several advantages over bitcoin, including faster and cheaper transactions. Not only do altcoins offer a wider variety of choice, they also help to keep bitcoin developers on their toes, and make sure bitcoin’s quality doesn’t plummet.
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