Altcoin | What is an altcoin?
These days, everybody talks about altcoins. Indeed, bitcoin is no longer a profitable coin to mine if you don’t have the specialized hardware. Therefore, people are looking for easier coins to mine. And with the large choice available, it’s not that simple to find the best altcoin to mine. But let’s start at the beginning: What is an altcoin?
Definition of altcoin
What is altcoin? The term altcoin, or alt coin, comes from ALTernative COIN (I also read about alternate coin sometimes). While some people use this term to define cryptocurrencies in general, I prefer to keep it as an alternative to bitcoin. Indeed, bitcoin is the first digital currency and, as such, is the reference. And all the newcomers are alternatives.
Bitcoin is not the only crypto-coin anymore. Indeed, since 2009, many new coins have hit the market. And all these new coins are alt coins. And the first alternative currency is the namecoin, which is based on the decentralization of domain name registration.
The first clone of bitcoin, litecoin, is available since October 2011. And there are more than 700 cryptographic currencies available on the market today. While many of them are not worth much (or are simply scams like onecoin), some of them could make you rich!
Founding principles of altcoins
In the cryptomoney industry, there are founding principles each coin has to respect, such as decentralization and total transparency. Therefore, a true cryptocurrency always has a blockchain, or chain of blocks. And its code is generally available to the whole community. Furthermore, the community is in charge of all major decisions on the future of the currency, which should respect the specifications defined when creating the currency.
As a result, if you find a “crypto-currency” that has neither a block chain nor free software available, it’s NOT an altcoin. But it’s most certainly a scam to extort money from you, using the reputation of the bitcoin.
What altcoins to invest in?
While you could buy many coins from many unknown altcoins, it’s a risky investment. Therefore, if you want to buy altcoins, you should focus on the currencies which have a daily trade volume of at least 100,000 USD. To play it safer, you could invest in the most serious alt-coins, with a daily exchange volume of more than a million dollars such as ethereum, ripple, litecoin, monero, Factom or Zcash.
Since the currencies are dynamic, you should study their prices regularly before buying altcoins. And don’t forget to invest only what you can afford to lose!