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If this is the first you’ve heard about altcoins, you might start thinking that they are new cryptos that were recently introduced to the market. Well, they’re not. Altcoins are cryptocurrencies other than Bitcoin. These altcoins usually have the same characteristics as Bitcoins, but at the same time, they are also different in certain aspects, such as transactions verifications or value fluctuations.
Investing in altcoins is not a bad idea; they are still categorised as cryptocurrencies. They might be called differently since Bitcoin was the first crypto to be introduced, and at the same time, Bitcoin remains the most popular crypto today. Take note, investing in altcoins also comes with risks that you should watch out for. Just because they’re altcoins, it doesn’t mean they won’t come with risks anymore.
Risks such as volatility are still present and should not be taken lightly. Luckily, there are now different ways to minimise the risks, which give you an easier time. So, if you want to start investing in altcoins with Bitcoin Revolution, here’s what you need to know.
What is an Altcoin?
The word altcoin comes from the word ‘alt’ and ‘coin.’ An altcoin is not single crypto but all of the cryptos in the market aside from Bitcoin. An altcoin is more like an alternative. Like we’ve mentioned above, altcoin operate similar to Bitcoin, but most of these altcoin have different characteristics. Altcoins shares the same framework; that’s why the altcoins that you will find will most likely have the same function and share the same code in terms of peer-to-peer transactions.
One of the aspects of altcoins that differ from Bitcoins is their improvements. As we all know, Bitcoin was the first crypto to be introduced to the crypto market, and a lot of people started investing in it, some have gained profits, and some lost some. Since Bitcoin was the first, altcoins had the opportunity to improve based on the problems and risks that limit Bitcoin.
Several altcoins utilise a proof-of-stake method which minimises energy consumption in every transaction validation and also lessens the time to create new blocks to verify new transactions. Altcoins might also be the reason why the crypto market continuously rises. There are tons of investors who see altcoin as a good alternative to diversifying their investments.
Different Types of Altcoins
Altcoins also have different categories and functions. If you want to start investing in altcoins today, you might as well start familiarising yourself with its categories. Knowing the different types of altcoins can also help you decide which one’s best for you.
Stablecoins
One of the significant risks that hinder the full growth of crypto is its volatility. High volatility is probably one of the many concerns of investors since it greatly affects their investments. That is where stablecoins come into play. Stablecoin’s main goal is to reduce the volatility of crypto by stabilising its value. Some of the types of stablecoins that were introduced to the market are supported by fiat currencies. Price fluctuations mostly won’t affect stablecoins since they have a limited range.
Mined Coins
There are also types of altcoins that came from mining. Some of the popular cryptos, such as Litecoin, Monero, and many more, came from mining. Meaning to say, the birth of these altcoin was because they were mined. The process is also similar to a popular alternative in earning crypto, where miners solve complex equations and whoever solves the problem first will get to earn cryptos in return.
Should You Invest in Altcoins?
Considering the market cap of the popular altcoin, they are worth investing in. If you observe the crypto market, you will notice that the growth of altcoins has significantly improved over the years, and their value continuously improves. Altcoins may also be the reason why there are tons of businesses that accept the use of crypto as a form of payment in exchange for different goods. If you are well familiar with the risks associated with crypto, there is no reason why you shouldn’t invest.
Conclusion
Cryptocurrency is still not its final stage as there are still a lot of things to improve, but at the same time, now is still a good time to start investing since you’ll get familiar with the risks, and you can use the opportunity to come up with different ways to minimise them. If you want to start investing today, crypto exchange platforms are a good place to start.