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Altcoin

The term “altcoin” is a combination of two words: “alternative” and “coin.” Altcoins are all cryptocurrencies other than Bitcoin. They are called “alternative” because they were launched as alternatives to Bitcoin, which was the first and remains the most widely used and valuable cryptocurrency.

Origins of Altcoins: Bitcoin, introduced in 2009, paved the way for the cryptocurrency movement. However, as its popularity grew, so did the perceived shortcomings and areas for improvement. This led to the creation of altcoins, each offering different features, use cases, and underlying technologies.

Types of Altcoins:

  1. Forks of Bitcoin: These are coins created from Bitcoin’s open-source protocol. They include Bitcoin Cash, Bitcoin SV, and others.
  2. Ethereum-Based Tokens: Many altcoins are built on the Ethereum platform using its ERC-20 token standard. Examples include Chainlink, USDC, and Uniswap.
  3. Native Cryptocurrencies: These are coins of separate blockchain platforms designed for specific use cases. Examples include Ethereum’s Ether, Ripple’s XRP, and Cardano’s ADA.

Why Do Altcoins Exist?

  1. Innovation: Altcoins often introduce new features, consensus mechanisms, or transaction capabilities that Bitcoin doesn’t offer.
  2. Niche Markets: Some altcoins cater to specific industries or applications, such as decentralized finance (DeFi) or supply chain management.
  3. Competition: The cryptocurrency space thrives on competition, with each altcoin vying for market share and user adoption.

Benefits of Altcoins:

  1. Diversification: Investors can diversify their cryptocurrency portfolios by investing in various altcoins.
  2. Potential for High Returns: Some altcoins have seen significant price appreciation over short periods.
  3. Advanced Features: Altcoins can offer faster transaction times, lower fees, better privacy features, or other advantages over Bitcoin.

Considerations:

  1. Volatility: Altcoins can be highly volatile, with prices subject to rapid and significant fluctuations.
  2. Regulatory Concerns: Some altcoins might face regulatory scrutiny or bans in certain jurisdictions.
  3. Liquidity: Not all altcoins are widely traded, which can make buying or selling them challenging.
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CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin62,335 1.13 % 0.51 % 12.17 %
Litecoin79.40 0.65 % 1.20 % 19.19 %
Ethereum2,197.2 0.23 % 0.67 % 2.46 %
USDC1.000 0.10 % 0.02 % 0.08 %
Cardano0.2543 0.15 % 1.68 % 3.38 %
Tether0.9990 0.10 % 0.04 % 0.02 %
Binance Coin (Wormhole)222.47 0.38 % 4.71 % 3.08 %