Altcoins are cryptocurrencies created after the creation of Bitcoin. They are called alternative coins, created after the success of Bitcoin. These coins are produced to do better than Bitcoin; they are designed as a better replacement to better serve the users in ways Bitcoin can’t. They are generally created to improve on the shortcomings of Bitcoin. For example, the mechanism Bitcoin uses in creating blocks and transaction is energy-consuming and time-wasting. Still, with the advent of Altcoins, we can develop partnerships and transact quickly without much energy consumption. The mechanisms these coins work on are more effective than Bitcoin’s consensus mechanism.

The earliest altcoin, Namecoin, was introduced on the 12th of April. It was created to improve anonymity and censorship resistance. It allowed users to register their .bit domain, which facilitated anonymity and censorship resistance.

These coins are created to go beyond Bitcoin’s limitations. According to Investopedia, as of March 2021, altcoins accounted for 40% of the total supply of cryptocurrencies, with more than 9,000 cryptocurrencies and counting.

Categories of Altcoins

There are different categories of altcoins based on their functionalities and consensus mechanisms. Here’s a little out of many essential types.

  • Mining-Based Altcoins: These are altcoins created for solving cryptographic equations to unlock blocks. Some of the top altcoins are mining-based. An example is the popular Ethereum.
  • Security tokens: These tokens are linked to businesses; they are often likened to stocks as they promise dividends like ownership of business or payout.
  • Stable coins: Crypto coins are known for their high volatility. In a bid to cancel this, stable coins were created. This is achieved by tying the value of these coins to real-life assets (like fiat currencies), natural resources (like Gold). One famous example is the Tether (USDT). When other crypto coins are dipping due to a market crisis, the Tether is usually not subject to this.

Advantages of Altcoins

Great investment tools

Bitcoin is a costly asset for the average person to buy and invest in. Investors who are looking to start from ground level can leverage great and new altcoins. You can buy altcoins at a very low price and trade them for Bitcoin when the price increases. Fortunately, you can exchange your altcoins for Bitcoin with trading bots like Bitcoin rush.

Reduced Cost

Bitcoin is more expensive in terms of mining and transactional fees. Altcoins are the way to go when considering the low cost.

Disadvantages of Altcoins

The major drawback of Altcoins is that they are yet to be popular. Hence, they are not recognized as means of payment. Companies use bitcoin as means of payment because this is a common cryptocurrency compared to other altcoins. Although companies have started adopting altcoins as means of payment, it is just not yet common.

Another drawback is that the values of these altcoins are volatile and so can change at a fantastic rate. It could be positive, and it could be damaging.

How to get Altcoins

You can trade your Bitcoin for altcoins using trading bots like Bitcoin rush; if you don’t have Bitcoin to deal with, use the next option. All you need is a reputable fiat-to-crypto exchange. This is for those who will like to exchange their fiat currency with crypto. Use exchanges like Binance, Coinbase, and other reputable exchanges. Make sure you deal with the proper exchange, so you don’t lose your money.

Conclusion

Altcoins are excellent long-term investments. When compared to Bitcoin, they offer lower transaction fees and faster transaction times. On the other hand, the general population has yet to accept them as a result of their lack of exposure to them.