What are Altcoins? Are they the next Bitcoin?
After missing the huge rally of bitcoin, people began recognizing the potential of crypto. If you regret missing the rally, don't worry as there are several shots left. Probably you would’ve heard about Altcoin. if not, let’s, deep dive.
As the name suggests, Altcoin refers to Alternative coins. Any cryptocurrency excluding bitcoin comes under this category.
You might be wondering Bitcoin is the most popular crypto in high demand, why there is a need for its alternative?
Need of Altcoins?
Bitcoin is not perfect, that's the main reason for the boom of Altcoins. Many new projects are coming in to solve this trouble.
Limitation of bitcoin and its alternative
· The number of bitcoin that can be mined is 21 million but with Litecoin the mining limit increases up to 84 million
· Bitcoin has a limitation in on-chain transaction processing, as a new coin will be added every 10 minutes but with Litecoin the time limit is 2.5 minutes
· When it comes to anonymity Dash coin, Horizen and Monero are much more privacy-centric than bitcoin
As per the survey, there are almost 5000 Altcoins presently in the market, but only a handful of them gain popularity for their vision and legitimacy.
Don’t hover over the Buzz:
People who are jumping in the crypto without understanding the project vision just to make quick bucks may face some major losses as several crypto founders use Pump and Dump schemes.
In this scheme, the company will create a hype of the crypto leading the people to buy, resulting in an increment of value. As the value of crypto increases, they sell their stake, cash in the money and leave. This way the people who bought it with the hope of making quick bucks were unable to find buyers and are trapped, ultimately end up making losses.
Cryptocurrencies with huge potential in upcoming times:
Ethereum:
Ethereum is the most sought-after crypto-asset following bitcoin. It ranked 2nd in market capitalisation behind bitcoin. The crypto was launched in 2014 to create a decentralised finance system with free access to everyone around the world.
The crypto has launched its upgraded version Ethereum 2.0 which is more scalable, efficient with increased transaction speed. The version works on the Proof of Stake mechanism for mining. As of February 2021, the market capitalisation of Ethereum is near to $200 billion.
Litecoin:
Launched in 2011 by an MIT graduate and former Google engineer Charlie Lee, with an intent follow the footprints of bitcoin with enhanced features like fast generation and less transaction time.
As of January 2021, Litecoin has a market cap of around $10.1 billion.
Chainlink:
Developed by Sergey Nazarov and Steve Ellis, this crypto bridges the gap of off-blockchain sources to on-blockchain smart contracts by utilizing Oracle.
Oracle act as middleware and validate the transaction going on in the node. The market cap of this innovative crypto is $8.6 billion as of January 2021.
Bottom line:
Apart from the mentioned cryptos, numerous projects are running with a promising future and on a larger picture, the rally hasn’t even started yet. If you are genuinely interested in the crypto revolution (not on a quick gain) there are numerous opportunities. Study the whitepaper of the project, know about their vision, inspect every aspect from your side and invest in it.
