Altcoins, ie not only Bitcoin – are popular cryptocurrencies

Cryptocurrencies are a market with great prospects. Many people are taking their first steps in investing in exchanges that manage Bitcoin and other virtual coins. What are altcoins and why should you look at them?

What is cryptocurrency?

Cryptocurrency is the modern currency of the future, based on cryptographic systems. We often combine the definition of cryptocurrencies with blockchain – a distributed processing technology that makes cryptocurrencies so interesting..

Traditional money – the so-called fiat or fiat – is managed by central banks and regulators. When it comes to cryptocurrencies, we are dealing with a network of peers, which makes them independent and secure currencies that can provide a high degree of anonymity.. For this reason, virtual coins were primarily associated with the “black market” and illegal transactions. Today, however, they are becoming an increasingly popular solution in ordinary trade. The number of companies accepting payments in Bitcoin and other cryptocurrencies is constantly growing, including Tesla.

Cryptocurrencies can be considered a subcategory of virtual currencies. However, they differ in the use of cryptography and management in a distributed system. The first cryptocurrency is the work of a signatory (or people) like Satoshi Nakamoto – interestingly, the true identity of the creator of Bitcoin is still unknown.. Bitcoin was created in 2009, which gives us an idea of ​​how “fresh” this type of payment instrument is. In the first decade of operation of this type of currency, Bitcoin was a kind of synonym for virtual coins. Nowadays, however, there are many subcoins that offer slightly different functionality – they also differ in value.

Bitcoin is the king of cryptocurrencies and no ruler will sit on the throne forever

We associate most cryptocurrencies with Bitcoin. Investors’ dreams were ignited by its history – it used to be worth a penny, today you can buy a sports car for only one Bitcoin.. In March 2021, the exchange rate fluctuated around 200,000 PLN, with significant fluctuations typical of this type of currency. At the moment of its highest value, its price reached 250,000 PLN, and at the beginning of the month it was about 170,000 PLN. These are large sums – especially considering this 5 years ago, the price of Bitcoin was more than a hundred times (!) Lower than today.

But keep in mind that the cryptocurrency market is very dynamic. The current state of Bitcoin is the result of many variables. Its value is strengthened, among other things, by Tesla and other technology companies. Bitcoin is slowly becoming a widely accepted trading tool, and it is useful for people who have been investing in cryptocurrencies for a long time. However, it is also a risk for people who want to enter the cryptocurrency market and expect significant growth.

For this reason, more and more investors are looking for alternatives. Altcoins, that is. altalternative (against BTC) coiny is of interest to both regular representatives of cryptocurrency exchanges and people who are not involved in this sector.

What are altcoins?

altcoins

Alternative cryptocurrencies are mostly tailored to the needs of a particular sector and market. They offer a variety of unique features that encourage investors to use these currencies more or less.

Blockchain technology gives us great opportunities to adapt cryptocurrency offers to the needs of a particular project. So the question is – how many altcoins are there now?? It is not easy to answer, because new ones continue to appear. A year ago, we could count about 4,000 of them, but now this number has exceeded 5,000. This again shows the instability and, at the same time, the astonishing speed of the evolution of this gypsum.

Many subcoins are simply an attempt to recreate the success of Bitcoin – usually quite a failure. Only a small portion offers value to investors; some, in turn, were created not as a means of raising capital, but as a means of exchange. Among the more than 5,000 alternative coins, there are notable altcoins. Take a look at the most interesting non-Bitcoin cryptocurrencies.

Remarkable altcoins in 2021

These are some of the important alternative currencies that should attract the attention of investors and fans of this type of technology in 2021. These are coins with a very interesting structure and offering a variety of opportunities, which makes their prospects very interesting.

Ethereum – a name known even to people who are not engaged in cryptocurrency

Ethereum is the most popular after Bitcoin. It’s usually the currency we actually use on the Ethereum platform – it’s called Ether (ETH).. Ethereum, in turn, is a tool for creating and implementing so-called smart contracts (smart contracts).

The functionality of the platform is great – from the execution and payment of orders in the programming sector to the conclusion of contracts within large corporations and small companies. However, the currency has several disadvantages: one of them is the lack of a supply limit, which limits the potential amount of ETH to be mined. Bitcoin is equipped with such an option that makes more people pay attention to the king of cryptocurrencies as a safe long-term investment. However, the value of Ethereum reaches several thousand zlotys and has been growing steadily for more than a year..

Aave – Cryptocurrencies can also be a way to lend

Aave is a protocol that allows you to make a deposit or take a loan in cryptocurrencies. This technology is based on open source solutions, so that people with the appropriate technical knowledge can get detailed information about its activities. Aave, like Ethereum, uses the concept of smart contracts. Here, they are implemented to ensure the security of both borrowers and lenders. Aave’s functionality is very rich – it’s impossible to review. Those interested can watch the video prepared by Aave employees:

https://www.youtube.com/watch?v=48nxw6fVTRE

Monero – private, secure and undiscovered

Monero is a cryptocurrency whose main advantages are privacy, processing speed and security. Its functionality is based on a system in which no entity can yet access the source of the transaction being processed within the distributed system.. Monero sampling transparency allows you to disclose transaction information to the individuals we select. This means of payment should be a solution, first of all, for people who for some reason want to “escape” from the ordinary banking system. This cryptocurrency can definitely attract more users in the coming years, especially during crises and social unrest.

Dogecoin – Not all altcoins are serious projects

This is just one of the many tweets Elon Musk wrote about Dogecoin. Source: Twitter

Dogecoin is a cryptocurrency contributed to its popularity by Elon Musk. This is the best evidence of how populism and social media have affected the cryptocurrency market. Perhaps for many investors, Dogecoin will be another reason to lose confidence in cryptocurrencies and apply regulation to this market.. Dogecoin emerged as a more widespread Bitcoin. The right investment in this currency can pay off – its exchange rate jumps up to twice a day. However, this is not an expression of the true value of Dogecoin, but the entire envelope surrounding the coin.

Bitcoin Cash is an interesting way to exchange money

It is a cryptocurrency whose name belongs to its ancestor, but the differences between the two coins are significant. Bitcoin Cash was created as a means of payment and cross-border exchange. Therefore, we are talking about a similar functionality, such as PayPal, PayU or Przelewy24 – of course, in this case we are not talking about card transfers or payments to the account, but the exchange of information using a blockchain. Bitcoin Cash aims to be a modern, inexpensive, fast and convenient means of payment with universal coverage. The currency should work primarily for everyday users, but also for companies that manage funds internationally.

The role of altcoins in cross-border investments

Bitcoin Cash is an example of a currency that works perfectly in an international transaction environment. The exchange of bank funds between countries is quite difficult – in many cases we have to take into account the slow processing and high commissions. Bitcoin Cash and other cryptocurrencies like XRP and Litecoin are doing great work in this area. Due to the specifics of their activities, they provide fast and very secure transactions, regardless of the country where the recipient and sender of funds are located. These are other subcoins that deserve special attention, especially in the context of companies operating in the international market.

Risks associated with investing in altcoins

Is it worth investing in altcoins? It is difficult to find a concrete answer to this question. Experienced cryptocurrency players should definitely be interested in diversifying their portfolio – like any other investment. The assumption that Bitcoin itself will continue to grow is very risky. It is possible that this will be eliminated with new technology, or that cryptographic blocks will be more unreliable than we currently think. Recently, there have been many concerns about the low speed of operation and the high energy demand of the entire system.

You should also keep in mind that cryptocurrencies are often prone to populism and market manipulation. The fact that Bitcoin has such a high value is the best evidence of the impact of the lack of strict rules – this is both a strength and a weakness. However, it seems that the period without a specific legal status is slowly passing. At present, it is difficult to say whether this will be beneficial for the position of Bitcoin (and other cryptocurrencies) or vice versa.

It is very difficult to successfully invest in such an unstable and constantly evolving market. It is extremely important to maintain an appropriate level of security, as well as to pay attention to small operations in the first place. Despite current trends, cryptocurrencies should still be considered a high-risk market. However, greater confidence in virtual coins will undoubtedly help to make such solutions more widely available..

Sources: TechRadar, Benzinga, Aave, Medium (Anthony Back), Monero

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