Introduction to Altcoins
Altcoins are ‘alternative cryptocurrencies’ that were launched after the success of bitcoin- the best cryptocurrency in India. These coins generally project themselves as the better version of bitcoins.
After the inception of the first cryptocurrency- Bitcoin, many other digital currencies began entering the market. Those crypto assets were altogether named altcoins by the administrating community. So basically, there are two types of cryptocurrencies in the crypto world, the first is the king- Bitcoin and the second are the Altcoins.
Namecoin and litecoin are the early examples of altcoins that came into existence in the year 2011 after the introduction of bitcoin which was launched in the year 2009.
Apart from them, there are some other types of altcoins that are mentioned below.
- Stablecoins- These coins peg their value to some external references like fiat currencies. A popular example of stablecoin is Tether.
- Privacy tokens- These are the altcoins that create anonymity in the transaction history. These tokens include- Dash and Monero.
- Utility tokens- These tokens are generally platform-specific and are used for subscriptions.
- Non- fungible tokens (NFTs)- The coins that have unique characteristics and cannot be recreated are known as NFTs.
After understanding different types of altcoins, let us move forward to the pros and cons of the same.
Pros of altcoins
Here are some of the most significant advantages of using altcoins. These will help you to increase your knowledge about the usefulness and benefits of alternative coins.
- It creates improvements to the shortcomings of bitcoin to make itself more valuable and preferable.
- Generates and increases innovation scope in the crypto world.
- It develops a competitive edge between the cryptos to get better solutions and provide users with possible use cases.
- Both altcoins and bitcoin are the cheaper and faster substitutes of fiat currencies in cross-border transactions.
Cons of altcoins
Like the advantages, there are also some disadvantages of altcoins which you should look at before investing in them.
- Altcoins are subject to market risk. They are volatile in nature when considered for short term planning. Their prices are very unpredictable and are risky avenues for short term investments.
- Some altcoins can be scams. Hence, it is best to consider reliable and reputed platforms to avoid mishappenings with your investments. For instance, you can go with Wazirx, one of the leading
Bitcoins and altcoins both together comprise the crypto industry. They all have several benefits and risks associated with them. It’s up to you to choose wisely and from a recognised crypto trading platform to prevent fraud and scams. Also, you may seek professional financial help for the right guidance and support.