What is Altcoin? (Alternative Coin)

What is Altcoin? (Alternative Coin)

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“Altcoin” derives its name from the words Alternative Coin. Bitcoin was the first cryptocurrency coin that was ever created, and all coins that were created after it is known as Altcoins because they are an alternative to Bitcoin.

Altcoins share some characteristics with Bitcoin, but they are different in many ways. Altcoins use different consensus methods to produce blocks and to validate transactions.

Altcoins are also different from Bitcoin because they can add new or additional capabilities such as smart contracts, larger blocks (scalability), or low-price volatility.

As of September, there are over 12,000 cryptocurrencies according to CoinMarketCap, and as of March, Altcoins account for more than 40% of the cryptocurrency market, and crypto analysts forecast that the Altcoin market will surge between 80% – 150%.

Altcoins are derived from Bitcoin, which means that the price movements of Altcoins mimic that of Bitcoin's trajectory. However, according to analysts, as cryptocurrency investment ecosystems and the development of new markets mature, price movements for Altcoins will become independent of Bitcoin trading signals.

Risk management in any type of trading and investing is crucial, and when trading Altcoins, investors and traders must ensure the following:

  • Use small percentages in single trades – not more than 5% of capital.
  • Ensure that there is an estimated duration for every trade and that trades are not left open for extended periods.
  • Control position sizes and consider splitting positions.
  • Accept losses when they happen.
  • Always use stop-losses to avoid losing too much in a single trade.
  • Always use a 1:2 or 1:3 risk-reward ratio where the reward is more than the risk.

 

Depending on the functions and consensus mechanisms they have, Altcoins can come in different categories, namely:

  • Mining-based Altcoins – which use proof-of-work (PoW) that involves solving complex puzzles to validate transactions and create blocks that are added to the blockchain.
  • Stablecoins – which are pegged to a fiat currency, precious metals, or other cryptocurrencies, subsequently reducing their volatility.
  • Security Tokens are like securities that are exchanged in stock markets, but they have digital provenance.
  • Utility tokens provide services within a network and can either be used to purchase services or redeem certain rewards.

 

While there are more than 12,000 different Altcoins at the time of writing, these are currently the top 10 contenders in the Altcoin Cryptocurrency space according to market capitalization are:

  1. Ethereum (ETH) – $336B
  2. Cardano (ADA) – $66B
  3. Tether (USDT) – $68.63B
  4. Binance Coin (BNB) – $56B
  5. XRP (XRP) – $42B
  6. Solana (SOL) – $41.33B
  7. USD Coin (USDC) – $31.15B
  8. Polkadot (DOT) – $29.21B
  9. Dogecoin (DOGE) – $27.24B

 

How do Altcoins work?

Altcoins work in a similar way to Bitcoin, and they have the following key characteristics:

  1. Altcoins use blockchain technology and a public ledger to record transactions permanently and publically.
  2. Once transactions are recorded, they cannot be altered or denied.
  3. The blockchain is secured by mathematical proofs that confirm transactions in blocks, for instance, Proof-of-Work, Proof-of-Stake, or others.
  4. Altcoins use blockchain technology for secure peer-to-peer transactions.
  5. Altcoins have a very liquid market because of their overall functionality, fast transaction processing rates, and scalability.
  6. The transaction speed of Altcoins is faster than bitcoin because of the unique blockchains they use.

 

What is the total amount of money invested in Altcoins?

The total money invested in Altcoins is $1.1 trillion [2021/09/27]

 

  Total Market Value per Year in Existence
Coin 2013 2014 2015 2016 2017 2018 2019 2020 2021
Ethereum (ETH) $42.82M $71.18M $898M $96B $16.5B $14.7B $88B
Cardano (ADA) $480M $18B $1.17B $849M $5B
Tether (USDT) $250K $950K $9.95M $1.48B $1.89B $4B $21.3B
Binance Coin (BNB) $10M $900M $800M $2.19B $6.03B
XRP (XRP) $33M $219M $642M $201M $238M $92.6B $14B $8.4B $10B
Solana (SOL) $10M $83M
USD Coin (USDC) $24.42M $261M $518M $4.2B
Polkadot (DOT) $5.23B $7.4B
Dogecoin (DOGE) $7.2M $6M $15M $15M $24M $1.05B $273M $249M $88B
Total Market Crypto Market Value $91M $1.3B $900B $600B $2.7B $371B $57.9B $66B $1.3T

 

      1. Ethereum (ETH)

The price of Ethereum is forecasted to reach $2,800 by January 2022, with a maximum of $3,500 and a minimum of $2,634. The reasons behind the increase in value are as follows:

  • Many mainstream brokerages have restricted transactions has caused retail investors to invest in the decentralized crypto market.
  • Ethereum is experiencing a lot of momentum, with the market seeing several peaks over the past few months.
  • According to statistics from the Ethereum options market, call options are larger than put options, showing that there is bullish sentiment in the market.
  • There is a stable rise from the DeFi ecosystem as adoption becomes more widespread, with over $50 billion locked in the DeFi ecosystem.

 

      2. Cardano (ADA)

Cardano is set to increase to $2.006 by January 2022, with a maximum price of $2.5 and a minimum price of $1.7. The factor behind the rise in ADA prices is its limited coin supply, and because the coin is resistant to inflation, demand is very high.

Cardano has a secure blockchain, and it has a layered architecture that ensures scalability, which is a technical characteristic that will ensure that there is an appreciation of value in Cardano.

 

      3. Tether (USDT)

Tether's value is pegged to the United States at a 1:1 ratio, which means that the value of Tether does not fluctuate like other Altcoins.

 

      4. Binance Coin (BNB)

Binance Coin is forecasted to increase to $328 by January 2022, with an expected maximum of $410 and a minimum of $279. The value of BNB can be tied to the Binance exchange as the largest exchange in the crypto space, with a $101 billion daily trading volume.

The more users trade and interact on Binance. The more users buy BNB to receive discounts on transaction fees. These BNB coins are then spent, and they will be bought by other traders, ensuring that the price keeps increasing.

 

      5. XRP (XRP)

XRP's price is forecasted to reach $1.2 by January 2022, with a maximum price of $1.5 and a minimum price of $1.0. The price of XRP is rising because the coin is being relisted by major exchanges after the SEC lawsuit that Ripple faced.

 

      6. Solana (SOL)

Solana's price is forecasted to reach $117 by January 2022, with a maximum price of $147 and a minimum price of $100. The price of SOL is rising because of the Nonfungible Token (NFT) ecosystem that Solana is building on its blockchain, with Solsea's open marketplace opening.

Solana's Ignition hackathon, with up to $5 million in prizes and seed funding that can be earned. Solana has a powerful blockchain that can accommodate such events and projects with ease.

SOL is a viable option in staking for a passive income, which is drawing more investors.

 

      7. USD Coin (USDC)

USD Coin's value is pegged to the United States at a 1:1 ratio, which means that the value of USDC does not fluctuate like other Altcoins.

 

      8. Polkadot (DOT)

Polkadot's price is set to increase to $26.00 in January 2022, with a maximum price of $32 and a minimum price of $22. DOT is gaining popularity, and because of its connection with DeFi and smart contracts, Polkadot's blockchain is allowing developers to create a wide range of projects.

Polkadot's Proof-of-stake system is another reason why the price of DOT is rising, with nominators backing validators with DOT tokens, which shows faith in the good behavior of backed validators.

 

      9. Dogecoin (DOGE)

Dogecoin's price is set to reach $0.27 by January 2022, with a maximum price of $0.34 and a minimum price of $0.23. The price of DOGE is increasing because of its rebound with investors.

Elon Musk and the Ethereum co-founder Vitalik Buterin along with the Twitter CEO Jack Dorsey, all made Dogecoin-derived donations in the past year, which is driving investors to the coin with its positive social impact.

Because of its large and supportive community and the support it has from popular names in the technology circles, Merchants are starting to accept DOGE as payment, which is causing the value of the coin to increase.

 

What are Green Coins as an Altcoin?

One of the major controversies against Bitcoin and cryptocurrency overall is that they are not environmentally friendly. However, there are Green Altcoins that have been identified as environmentally friendly alternatives:

  1. Chia
  2. Ethereum
  3. Solarcoin
  4. Cardano
  5. Litecoin

 

      1. Chia

Chia is a “Green” cryptocurrency that uses Proofs of Space and Time to farm coins instead of mining them. This consensus is more energy-efficient than the traditional Proof-of-Work method used by Bitcoin.

 

      2. Ethereum

Ethereum uses a Proof-of-Stake consensus method that addresses environmental concerns by eliminating competition between miners.

 

      3. Solarcoin

This coin aims to encourage real-world green behavior by allocating one Solarcoin for each megawatt-hour generated by solar technology. The coin rewards users who invest in renewable energy.

 

      4. Cardano

Cardano is another cryptocurrency that uses Proof-of-Stake to validate transactions which are then added to the blockchain. Instead of solving complex algorithms, the blockchain protocol values the percentage of coins held by a miner instead of the processing power that they have.

 

      5. Litecoin

Litecoin is like Bitcoin, but it uses a fraction of the time to mine these coins, which makes it a green alternative. Litecoin can be mined with any standard computer hardware, which means it uses less electricity in the mining process.

 

There is a massive movement towards sustainable development and “Greener” options for the future. These Green Altcoins are well-established and popular coins, and the market for sustainable cryptocurrencies has risen significantly in recent years.

Green altcoins use less energy-intensive methods of producing digital assets, which has increased the popularity of many altcoins that use consensus methods other than the traditional Proof-of-Work.

 

What are the types of Altcoins?

Altcoins can be categorized into four main types:

  1. Mining-based
  2. Stablecoins
  3. Security Tokens
  4. Utility Tokens

 

1. Mining-based

These types of altcoins are mined into existence when miners solve algorithms and validate transactions according to the Proof-of-Work (PoW) consensus method. This creates new blocks which are added to the blockchain.

The advantage of mining-based cryptocurrencies is that they are tamper-proof weightless, and they are utilitarian modern money.

Examples of PoW altcoins are:

  • Litecoin (LTC) – $153.00
  • Monero (XMR) – $243.00
  • Bitcoin Cash (BCH) – $507.00
  • Bitcoin SV (BSV) – $128.00

 

2. Stablecoins

Stablecoins were developed to offer the advantage of cryptocurrencies without the inherent price volatility. Stablecoins peg their value to an existing currency or a commodity in a one-for-one or 1:1 ratio. Many stablecoins such as USD Coin (USDC) and Tether (USDT) are pegged to the US Dollar, which means that one of these coins will always be equal to one US Dollar.

Profit cannot be earned when stablecoins appreciate, but there are several applications for a coin whose value does not fluctuate on the minute. Some stablecoins allow for funds to be kept in cryptocurrency exchange and for them to be converted into another crypto instead of fiat currencies.

Stablecoins are also used to send and receive funds globally. One of the most popular uses for stablecoins is decentralised finance (DeFi) because stablecoin holders can lend their crypto to others and earn interest on the loan without the need to use the services of a bank or other intermediary.

Several platforms reward users for offering their tokens by giving them governance tokens when they provide liquidity to the platform on top of the interest that they receive.

 Examples of stablecoins:

  • USD Coin (USDC) – $1.00
  • Tether (USDT) – $1.00
  • TrueUSD (TUSD) – $1.00
  • Dai Stablecoin (DAI) – $1.00

 

3. Security Tokens

Security tokens operate as investment contracts where the purchaser anticipates future profits that are derived from dividends, revenue share, or market appreciation.

Security Tokens differ from utility tokens as they follow strict rules about who can buy and transfer them. Security tokens resemble traditional stocks that promise equity n the form of ownership.

The prospect of price appreciation is one of the main reasons why investors are considering these tokens, and they are typically offered to investors through Security Token Offerings (STOs).

Examples of Security Tokens are:

  • Securrency – currently securing funds in a Series B STO
  • Harbor
  • Swarm
  • TZero

 

4. Utility Tokens

Utility Tokens are used on a cryptocurrency exchange trading platform to receive a service. Utility tokens are an ERC20 Ethereum standard created to be spent in a certain blockchain ecosystem.

The value of utility tokens depends on the demand for the product or the service that they represent. Utility tokens have the distinct advantage that they have applications in the real world, and they can be used to obtain certain digital products and services.

They can also earn users a passive income when they spend utility tokens, giving them access to governance tokens on an ecosystem. Utility tokens help companies build a secure environment where they can provide a wide range of different payment methods.

Only those who hold utility tokens can access a particular service or product, and many networks give voting rights to holders.

Examples of utility tokens are:

  • Binance Coin (BNB) – $351.00
  • Maker (MKR) – $2,370.00
  • OmiseGO (OMG) – $9.00
  • 0x (ZRX) – $0.90

 

Coin Type Information
Mining-based Uses a Proof-of-Work consensus that must be mined to validate transactions and to release new coins
Stablecoins Are pegged to a currency or other security to decrease volatility
Security Tokens Work in the same way as shares and provide profits from dividends, revenue share, or market appreciation
Utility Tokens  Can be used on the blockchain ecosystem to pay for services

 

What are the differences between Altcoins and Bitcoin?

Altcoins and Bitcoin differ in the following ways:

  1. Transaction Speed and Mining
  2. Blockchain and ecosystem structures
  3. Applications

 

      1. Transaction Speed and Mining

Altcoins can handle a large volume of transactions because the process involved with Bitcoin, known as mining, according to a PoW consensus method, is expensive and resource-intensive, while altcoins are more energy-efficient and cost-effective.

Altcoins use more innovative and affordable ways to verify transactions, which makes the transaction sped so much faster, with the benefit that transaction costs are much cheaper.

 

      2. Blockchain and ecosystem structures

All cryptocurrencies are based on some blockchain, but there are different blockchain ecosystems and structures. For example, Ethereum is based on a decentralized and peer-to-peer structure with the additional functionality of DApps and smart contracts.

Ethereum is open-source, and the blockchain can be used to develop different projects and cryptocurrencies (ERC20 tokens), making it more sustainable in the long term.

Litecoin, for instance, is based on the same principle as Bitcoin, but it uses unique Scrypt technology, and its verification process is much more energy-efficient than that of Bitcoin.

Bitcoin may have been the first cryptocurrency, but Altcoins have improved significantly by offering higher functionality and more versatility, extending the applications of cryptocurrency beyond a store of value or use as a currency.

 

      3. Applications

Bitcoin can be used as a currency to pay for goods and services. While many other altcoins can be used in the same way, others provide additional features across the cryptocurrency space.

Some tokens can be used to pay for ecosystem features, products, and services, while other tokens act like equities and shares to earn users' profits from dividends and other passive income. 

There are altcoins such as Ethereum that provide the perfect platform for projects to be created, expanding the crypto space even further. 

 

How do Bitcoin prices affect Altcoin prices?

Bitcoin is the best-known and most highly-valued cryptocurrency. Its price fluctuations will correlate with increases as well as decreases across other cryptocurrencies.

Every altcoin will have a dynamic price correlation with Bitcoin, and this means that each one has a different relationship with one another. Bitcoin's prices may have a direct or specific effect depending on the Altcoin.

Ethereum, for instance, has shown independence from fluctuations in the price of Bitcoin several times, which means that this price correlation is not always an exact science.

A general overview of what could happen, according to official sources, is the following:

  • If the price on Bitcoin rises quickly, it can suppress or depress altcoin prices as more money flows into Bitcoin trading and investment.
  • If the price of Bitcoin rises, it could take Altcoins with it if there is a new wave of adoption, such as a prominent business announcing that they accept Bitcoin payments.
  • If the price on Bitcoin falls sharply, it can depress Altcoins as more investors put their money in fiat and other investments, or this can cause Altcoins to increase rapidly and drastically, especially where traders trade Bitcoin for Altcoins.
  • If the price on Bitcoin remains stable, it can cause Altcoin prices to stabilize, or it can cause Altcoins to explode as investors and traders look for returns and favorable trades.

 

Some common price correlations between Bitcoin and Altcoins:

  • Bitcoin – Hackspace Capital with a correlation of 0.92 and influence of 83.74%.
  • Bitcoin – Condensate with a correlation of 0.92 and influence of 83.80%.
  • Bitcoin – LociCoin with a correlation of 0.92 and influence of 84.47%.
  • Litecoin Plus – with a correlation of 0.92 and influence of 84.28%.

 

Can Altcoin platforms be more profitable than Bitcoin?

Yes, Altcoin platforms can be more profitable than Bitcoin.

Even if Bitcoin is the largest, most valued cryptocurrency, other platforms show high profitability, such as Cardano, Binance Coin, XRP, and Ethereum, which are significant cryptocurrencies by market cap and trading volume.

Altcoin seasons occur when Bitcoin starts to lose some of its dominance when the Bitcoin total market cap decreases according to the overall market capitalization of all other cryptocurrency assets.

The causes of an Altcoin season cannot be determined, but the rule of thumb is that after a Bitcoin bull run, investors will sell Bitcoin to release their gains. These profits are subsequently used to buy Altcoins, which increases the market capitalization of Altcoins.

According to statistics, the next strongest contenders when there is an Altcoin season are Ethereum, Cardano, XRP, and Binance Coin for the large-cap coins. 

Smaller cap coins to watch during an Altcoin season are Bitpanda Ecosystem Token (BEST), Pantos (PAN), Chiliz (CHZ), Komodo (KMD), and 0x (ZRX), amongst several others.

There is a lot of excitement and hype that surrounds the Altcoin season, but this is risky business, especially because investors are buying into a hype that may not last long-term.

Investors who buy lesser-known Altcoins during an Altcoin season may make short-term profits, but there is no guarantee of return on investment. Investing in the Altcoin season could be a feasible secondary form of investment done with the money that the investor can comfortably lose.

 

Is Altcoin mining profitable compared to Bitcoin mining?

Yes, Altcoin mining has become more profitable than Bitcoin mining. Bitcoin mining is becoming more expensive because it requires a significant of computational power to solve algorithms, and the difficulty of these is increasing.

Bitcoin experiences a halving with every 210,000 blocks that are mined. With each halving, the block rewards for miners reduce, which will eventually make it unsustainable to many miners because the cost of mining Bitcoin is significantly more than the profits that could be gained from it.

When considering the profitability of Bitcoin, the cost of electricity to power computer systems, the availability and price of computer systems, and the difficulty in providing the services must be considered. The more miners enter the market to mine, the more difficult it will become to mine bitcoin.

The processes involved with Altcoin mining are much simpler and subsequently more profitable. Altcoins that have a Proof-of-Work consensus method that needs mining to validate transactions and add blocks to the blockchain can be done using GPU units, which are normal computers as opposed to ASIC computers that are costly and use a lot of power.

Not all Altcoins can be mined, depending on their consensus method. Many other Altcoins allow for staking, such as Ethereum, where users who have the most coins can validate transactions and add blocks.

Not only do Altcoins provide a more profitable way of mining, but they are more environmentally friendly as well.

 

What are Altcoin speculations?

When traders speculate on security, they use technical and fundamental analysis to determine the direction in which the price of a security may move, depending on driving forces such as news, investor hype, political issues, and several others.

According to technical indicators and fundamental factors, traders who speculate that the price of an Altcoin will appreciate will enter a long/buy position, while those who believe that an Altcoin will depreciate will enter a short/sell position.

Speculative trading, as with any type of trading and investing, is risky because the cryptocurrency market is extremely volatile, and prices can be influenced by the slightest things.

Bitcoin, for instance, plummeted from its $60,000 all-time high after Elon Musk expressed concerns surrounding its impact on the environment and after he questioned Bitcoin's decentralization.

 

Speculation 1 – Victor Pershikov (Senior Analyst)

According to the senior analyst, of all the Altcoins there are that investors can consider, Ripple's XRP is one of the major coins that have benefited from speculations made on Elon Musk as a “less toxic” cryptocurrency.

In addition to this, the analyst also cited Ethereum, which is aiming to reach a price level of $5,000. Ethereum currently has a background of fundamental positive in the project, which may ensure that it performs better in the market.

 

Speculation 2 – Yury Mazur (Data Analyst)

According to the analyst, Cardano, Uniswap, XLM, and XRP tokens appear stable. Cardano has shown significant strength and stability because of improved network infrastructure.

Uniswap is a flagship Decentralised Finance (DeFi) project that allows UNI to remain stable even when there is a time of market turbulence. According to Mazur, XRP has been kept afloat by the news surrounding Ripple (XRP's issuer) and the US Securities and Exchange Commission (SEC) regarding the lawsuit against Ripple.

Market participants have already considered all possible negative scenarios regarding XRP where the price is concerned, and it shows a significant level of resistance to negative. In contrast, XRP has shown some of the best performance all year since the issues with the lawsuit started.

XLM, a sister project to Ripple, is fundamentally supported by investors as the possible replacement for XRP, if it comes to that, according to the analyst.

 

Why do Altcoin communities use Reddit?

There are hundreds of different Cryptocurrency and Altcoin communities on Reddit. The reason why Reddit has become so popular for these Altcoin communities are:

  • Reddit is the perfect platform where crypto communities can market their blogs and reach a wider audience.
  • Reddit is frequented by young people, which allows for a younger generation of Altcoin traders and investors to emerge who want to benefit from the popularity of cryptocurrency and the potential it has.
  • Reddit has a very simplistic design, making it easier to focus on the main message that is sent across forums, often accommodated by videos and pictures, making it easier for the Altcoin community to share trends, analysis, and other information.
  • There is a significant community that is actively participating in different discussions, making it easy to get expert opinions and advice on trading and investment matters.

 

What are the best methods to exchange Altcoins?

Altcoins can be bought, sold, and exchanged through:

 

Traders can gain access to Altcoins through forex brokers who offer Altcoins as Contracts For Difference, where the trader can speculate on the price changes of the underlying asset without owning the actual digital currency.

When traders and investors use Cryptocurrency trading platforms, they have a chance to buy, sell, and exchange the actual asset. These exchanges offer traders and investors a variety of ways in which they can exchange Altcoins.

 

The best methods to exchange Altcoins are:

  1. Buying the dip and HODL
  2. Flow with the Market trend
  3. Scalping the Crypto Market

 

       1. Buying the dip and HODL

This involves buying an Altcoin when the market price of the coin is less than its true value and holding onto the coin until the market price rises to the true value or something much higher.

To calculate the true value of an Altcoin, traders and investors can analyse the price technical price trends by viewing price charts. When technical analysis is conducted, traders can analyse the highs and lows of the coin, weekly price changes, three months, and six months to obtain a midpoint or gauge before executing a trade.

 

      2. Flow with the market trend and not against it

In a bearish market, traders should avoid buying an Altcoin when the price keeps decreasing, especially if it is because of economic issues such as breaking news, government policy changes, civil unrest, etc.

The best way to analyse the direction of the market is by using market capitalization, supply depth, or the liquidity of the coin and the market. Bid and Sell sentiments will help to determine the market trend and its direction.

 

      3. Scalping the cryptocurrency market

The cryptocurrency market is well-known for its volatility, with prices that have short interval changes every second, every minute, and every five minutes.

When prices are examined in wider time intervals, traders will notice that there is a remarkable drift from the point the trader started looking as opening and closing prices are absent, unlike stocks and other securities that have set market times.

Scalping is one of the best day trading strategies that leverage drastic currency price changes during a short time. Traders who have low latency and fast internet speeds can use these time-sensitive trading strategies to make quick, small profits.

 

How to know when an Altcoin will emerge

 To know when an Altcoin will emerge, users can use a Coin Listing Alert, A Cryptocurrency Launch Calendar, by joining a major cryptocurrency exchange such as Binance or Coinbase and setting alerts, reading about Initial Coin Offerings (ICOs) in Newspaper, and by following Altcoin communities on Reddit.

 

How to compare Altcoin technologies to each other

There are four main types of blockchain technologies, these are:

  1. Public Blockchain
  2. Private Blockchain
  3. Hybrid Blockchain
  4. Federated Blockchain

 

      1. Public Blockchains

A public blockchain is a permission-less distributed ledger technology (DLT) that allows for anyone to join and carry out transactions. Public blockchains are non-restrictive, and each peer has a copy of the ledger.

Anyone can access the public blockchain if they have an internet connection. Bitcoin was the first-ever public blockchain, enabling anyone to connect and carry out decentralized transactions.

In terms of security, the verification process is done through consensus methods such as Proof-of-Work and Proof-of-Stake, and several others. At the core of this process, nodes do most of the work by validating transactions that make the blockchain work and make it secure.

Examples of public blockchains include:

  • Bitcoin
  • Ethereum
  • Litecoin
  • NEO

 

Public blockchains have a wide range of use-cases in the real world, including:

  • Voting – Governments can use this blockchain technology to vote through a public blockchain that employs transparency and trust.
  • Fundraising – Companies can use public blockchains to improve transparency and trust.

 

In terms of transaction speed, public blockchains lack speed, and it can take a few minutes for transactions to be completed. Bitcoin, for instance, can only handle seven transactions a minute, which is slow compared to the 24,000 transactions done by VISA per second.

In terms of value, a public blockchain is perfect for users to append data to global scalable and immutable trustworthy databases that are maintained by millions of computers.

It is more than just one database, but permanent storage spread across millions of nodes. With the user base growing on the network's infrastructure, it allows public blockchains to increase in intrinsic value.

 

Additional information about Public Blockchains can be obtained from ForexRecommend.

 

      2. Private Blockchains

A Private Blockchain is one of the different types of blockchain technology that can be defined as one that works in a more restrictive environment, such as a closed network.

Private blockchains are permission and under the control of an entity. Private blockchains are excellent for use by a privately-held company or an organization that only uses them internally.

Private blockchains are centralized as there is only one authority of the network, with the following examples:

  • Multichain
  • Hyperledger Fabric
  • Hyperledger Sawtooth
  • Corda

 

The real-world use cases for Private Blockchains are:

  • Supply chain management
  • Asset ownership allows for assets to be tracked and verified
  • Internal voting

 

In terms of transaction speed, Private blockchains are extremely fast because there are only a few participants on the network. It, therefore, takes less time for the network to reach a consensus, resulting in much faster transactions.

In terms of value, Private blockchains are extremely useful and valuable to organizations that need internal solutions.

Additional information about Private Blockchains can be obtained from ForexRecommend.

 

      3. Consortium Blockchain

A Consortium Blockchain also referred to as a Federated Blockchain, is a creative approach that helps to solve the needs of organizations, especially those who need both public and private blockchain features.

With a consortium blockchain, there are some aspects of the organization that are public while others remain private.

The consensus procedures in this type of blockchain are controlled by preset nodes. This network is not open to a significant amount of people, but it still has a decentralized nature. This is because the blockchain is managed by more than one organization.

To ensure that it functions correctly, the consortium has a validator node that performs two different functions, to validate transactions and to initiate or receive transactions.

Examples of Consortium Blockchains are:

  • Marco Polo
  • Energy Web Foundation
  • IBM Food Trust

 

In terms of security, these blockchains are extremely secure and have improved scalability. In terms of transaction speeds, it is a lot faster than public blockchains because of the controlled number of users.

In terms of value, these blockchains are extremely valuable because of their unique technology and what they can offer to the private and public sectors.

Use cases for consortium blockchains in the real world are:

  • Banking and payments – where a group of banks works together to develop a consortium.
  • Research – where organizations can share research data and results.
  • Food tracking

 

Additional information about Consortium Blockchains can be obtained from ForexRecommend.

 

      4. Hybrid Blockchain

This is a different type of blockchain technology that may sound like a consortium blockchain but is vastly different.

Hybrid blockchains are a combination of private and public blockchains, with use cases in organizations that do not want to deploy either a private or a public blockchain but want to deploy the best in both.

Examples of hybrid blockchains are:

  • Dragonchain
  • XinFin's Hybrid Blockchain

 

In terms of security, Hybrid blockchains are immune to 51% of attacks, and it offers privacy while it is connected to a public network. Hybrid blockchains are in a closed ecosystem, which means that transaction speed is still fast as there are only a few participants on the network, unlike with Public Blockchains.

In terms of value, Hybrid blockchains can be used across several different real-world applications, which make them extremely valuable. These applications include:

  • Real estate – which allows companies to run their systems and use the public blockchain to display information to the public.
  • Retail can use hybrid blockchains to streamline processes.
  • Highly regulated markets such as forex, shares, and other markets can use hybrid blockchains.

 

Additional information about Hybrid Blockchains can be obtained from ForexRecommend.

 

What are the Altcoins that are close to Bitcoin?

The Altcoins that are close to Bitcoin's value in terms of market capitalization are:

  1. Ethereum (ETH) – $336 billion market cap and price of $2,800
  2. Cardano (ADA) – $66 billion and a price of $2.00
  3. Binance Coin (BNB) – $56 billion and a price of $337
  4. XRP (XRP) – $42 billion and a price of $0.91
  5. Polygon (MATIC) – $7 billion and a price of $1.06
  6. Stellar (XLM) – $6 billion and a price of $0.26
  7. TRON (TRX) – $6 billion and a price of $0.08
  8. VeChain (VET) – $5 billion and a price of $0.08

 

Is Ethereum an Altcoin?

Yes, Ethereum is an Altcoin. Ethereum is the second-largest cryptocurrency after Bitcoin. Ethereum is different because of its unique blockchain structure and technology that allows developers to build projects on its blockchain.

 

  • Ethereum has a total value of $338 billion in market capitalization and a price of $2,800, and an unlimited supply.
  • Ethereum is a mining-based coin and one that can be staked.
  • The maximum value of Ethereum to date is $482 billion in May 2021.
  • The minimum value of Ethereum to date was $32 million in October 2015.
  • The price of Ethereum is forecasted to achieve $2,800 by January 2022, with a maximum of $3,500 and a minimum of $2,634.
  • Ethereum uses open-source technology that allows developers to design smart contracts and Decentralized Apps (DApps) on its blockchain. Many developers are designing new cryptocurrencies that are classified as ERC20 coins.

 

Is ADA an Altcoin?

Yes, ADA is an Altcoin. ADA is the 4th largest cryptocurrency after Bitcoin that uses a different consensus method and blockchain technology.

 

  • The total value of ADA is $66 billion in market capitalization with a price of $2.00 and a limited supply of 45,000,000,000 ADA coins.
  • ADA is a utility coin.
  • The maximum value of ADA to date was $94 billion in March 2021
  • The minimum value of ADA to date was $735 million in December 2018.
  • ADA is set to increase to $2.006 by January 2022, with a maximum price of $2.5 and a minimum price of $1.7.
  • Cardano is one of the largest blockchains that have successfully employed the Proof-of-Stake (PoS) consensus mechanism. Cardano's unique technology aims to find new ways for society to create a more secure and transparent structure, allowing for the development of DApps and smart contracts.

 

Is BNB an Altcoin?

Yes, BNB is an Altcoin. BNB is the native token for the Binance Crypto exchange. Binance is unique and has an ecosystem that has decentralized blockchain-based networks.

 

  • The total value of BNB is $56 billion in market capitalization with a current price of $337 and an unlimited supply of BNB coins.
  • BNB is a utility token that is used on the Binance network and ecosystem.
  • The maximum value of BNB to date is $103 billion achieved in May 2021.
  • The minimum value of BNB to date was $9 million in August 2017.
  • Binance Coin is forecasted to increase to $328 by January 2022, with an expected maximum of $410 and a minimum of $279.
  • BNB is the native utility coin for the Binance exchange. The exchange is decentralised and has an ecosystem of blockchain-based networks. BNB is an important part of the functioning of several Binance sub-projects. The Binance network includes the Binance Chain, Binance Smart Chain, and Binance Academy.

 

Is XRP an Altcoin?

Yes, XRP is an Altcoin. XRP is the cryptocurrency that is native to the XRP Ledger, and it aims to be a speedy, less costly, and more scalable alternative to Bitcoin and other assets.

 

  • The total value of XRP is $42 billion in market capitalization with a current price of $0.091 and a limited supply of 100,000,000,000 XRP.
  • XRP is a utility coin.
  • The maximum value of XRP is $130 billion, which was achieved in January 2018.
  • The minimum value of XRP is $24 million, which was achieved in August 2013.
  • XRP's price is forecasted to reach $1.2 by January 2022, with a maximum price of $1.5 and a minimum price of $1.0
  • The XRP ledger is maintained by the global XRP Community, and transactions on the XRP ledger take between 3 to 5 seconds. The XRP ledger is open-sourced and not based on any blockchain but a distributed ledger database.

 

Is MATIC an Altcoin?

Yes, MATIC is an Altcoin. MATIC differs from Bitcoin as it is an ERC20 token that runs on the Ethereum blockchain. MATIC is used for payment services on Polygon in addition to being a settlement currency between different users who operate on Polygon's ecosystem.

 

  • The value of MATIC is $7 billion in market capitalization, with a current price of $1.06 and a maximum supply of 10,000,000,000 MATIC.
  • MATIC is a utility coin.
  • The maximum value of MATIC is $15 billion achieved in May 2021.
  • The minimum value of MATIC is $7.24 million achieved in May 2019.
  • MATIC's price is forecasted to reach $1.3 in January 2022, with an expected maximum price of $1.7 and a minimum price of $1.2.
  • Polygon is a user-friendly platform for Ethereum scaling as well as infrastructure development. The main component of Polygon is Polycon SDK, a modular and flexible framework that supports the development of several different types of applications.

 

Is XLM an Altcoin?

Yes, XLM is an Altcoin. Stellar differs from Bitcoin as it allows for money to be moved and stored, a unique solution that caters to rural communities that do not have easy access to banking facilities.

 

  • The total value of XLM is $6 billion in market capitalization, with a current price of $0.26 and a maximum supply of 50,001,806,812 XLM.
  • XLM is a utility coin.
  • The maximum value of XLM is $16 billion achieved in May 2021.
  • The minimum value of XLM to date is $2.22 million achieved in August 2014.
  • The price forecast for XLM is $0.3 in January 2022, with an expected maximum price of $0.4 and a minimum of $0.3.
  • Stellar enables cross-border payments across different platforms at ultra-low costs of just 0.00001 XLM. Stellar has also secured partnerships with several large brand technology companies and fintech firms.

 

Is TRX an Altcoin?

Yes, TRX is an Altcoin. TRON differs from Bitcoin in that it aims to ensure that its technology can be used daily. Where Bitcoin can only handle a few transactions a second, TRON can handle 2,000 transactions per second.

 

  • The total value of TRX is $6 billion in market capitalization with a current price of $0.08 and an unlimited supply.
  • TRX is a utility coin.
  • The maximum value of TRX to date is $14 billion achieved in January 2018.
  • The minimum value of TRX to date is $18 million achieved in October 2017.
  • TRX's price is set to reach $0.11 in January 2022, with an expected maximum of $0.13 and a minimum of $0.09.
  • Tron's technology consists of an environment where content creators can interact with their audiences directly, ensuring that creators can lose less commission to middlemen.

 

Is VET an Altcoin?

Yes, VET is an Altcoin. VeChain differs from Bitcoin because it is a supply chain platform that aims to use distributed governance as well as the Internet of Things )IoT) to create a unique ecosystem that solves many problems of supply chain management.

 

  • The total value of VET is $5 billion in market capitalization with a current price of $0.08 and a maximum supply of 86,712,634,466 VET.
  • VET is a utility coin.
  • The maximum value of VET is $16 billion achieved in April 2021.
  • The minimum value of VET to date is $134 million achieved in March 2020.
  • The price of VET is set to reach $0.11 in January 2022, with an expected maximum price of $0.14 and a minimum price of $0.10.
  • VeChain aims to disrupt conventional supply chain models and use transparent technology to allow for greater security, efficiency, and ease of trading products in any given supply chain while simultaneously reducing costs by using trustless automation.

 

What are the top 50 Altcoins?

Ethereum (ETH)

Ethereum is a decentralized and open-sourced system that allows for the execution of smart contracts and DApps.

 

Tether (USDT)

Tether is a stablecoin that is pegged to the US Dollar in a 1:1 ratio.

 

Cardano (ADA)

Cardano is one of the largest blockchains that successfully employed a PoS consensus mechanism. All technology developed on the blockchain is peer-reviewed, and it also allows for the creation of smart contracts.

Cardano is also typically used by agricultural companies to track their fresh produce from field to fork. There are also educational products that are built on the blockchain and stored in a tamper-proof way.

 

Binance Coin (BNB)

Binance Coin is the utility token for the Binance Crypto exchange trading platform, one of the largest platforms in the industry.

 

XRP (XRP)

XRP is the native token for the XRP ledger, and it was created by Ripple to be fast, cost-effective, and more scalable. The XRP ledger is known for processing transactions every 3 to 5 seconds.

 

Solana (SOL)

Solana uses a Proof-of-History consensus that allows for greater scalability and which boosts usability. Solana allows decreased validation times for both transactions and smart contract execution.

Solana serves both small-time users as well as enterprise customers and promises low transaction costs while ensuring scalability and fast processing.

 

USD Coin (USDC)

USD Coin is a stable coin that is pegged to the USD on a 1:1 basis. There is $1 held for each USDC in a mix of cash and short-term US bonds.

 

Polkadot (DOT)

Polkadot is a shared multichain network that process can process many transactions on several chains in parallel, also known as parachains, which improves scalability.

 

Dogecoin (DOGE)

Dogecoin uses Scrypt technology and is primarily used as a tipping system on Reddit and Twitter to reward content creators.

 

Uniswap (UNI)

Uniswap creates liquidity for the Decentralised Finance spare and attempts to solve issues that platforms face. Uniswap automates the process involved with market-making and the protocol incentives activity by limiting risk while reducing costs for all parties.

 

Avalanche (AVAX)

Avalanche is a fast, smart contracts platform that is measured by time-to-finality that has the most validators that secure activity through a PoS protocol.

 

Terra (LUNA)

Terra sets itself apart by using fiat-pegged stablecoins. Terra combines the borderless benefits of crypto with the daily price stability of fiat currencies.

 

Binance USD (BUSD)

Binance USD is a 1:1 USD-backed stablecoin that is issued by Binance and is approved and regulated by the New York State Department of Financial Services (NYDFS).

 

Chainlink (LINK)

Chainlink is one of the first networks that allows the integration of off-chain data through smart contracts. ChainLink is one of the major participants in the data processing sphere.

 

Algorand (ALGO)

Algorand was developed to speed up transactions while improving efficiencies in response to the slow transaction times that Bitcoin and other blockchains struggle with. Algorand is known for its low transaction fees and PoS protocol.

 

Litecoin (LTC)

Litecoin is one of the most popular pure cryptocurrencies that can attribute its success to simplicity and clear utility benefits. Litecoin's technology is based on the Bitcoin protocol but differs in terms of its hashing algorithm.

 

Bitcoin Cash (BCH)

Bitcoin cash is a peer-to-peer electronic cash system that aims to become a sound global currency that has fast payments, low fees, privacy, and high transaction capacity with larger blocks.

Bitcoin Cash is permissionless, decentralized and it does not require third parties or a central bank.

 

Wrapped Bitcoin (WBTC)

Wrapped Bitcoin is the result of “wrapping” BTC in an ERC 20 standard, enabling full integration of Bitcoin-like assets into an advanced environment of DeFi, bringing immense liquidity associated with the BTC market.

 

Cosmos (ATOM)

Cosmos is often described as a third-generation blockchain to ensure that its infrastructure is straightforward. Cosmos' software development focuses on modularity, allowing a network to be build using portions of code that exist.

Cosmos also aims to improve scalability so that more transactions can be processed than with conventional blockchains such as Bitcoin and Ethereum.

 

Polygon (MATIC)

Polygon is considered a Layer-2 scaling solution that focuses on reducing the complexity involved with scalability and instant transactions. Polygon has a unique technology that allows it to achieve more than 65,000 transactions per block. Polygon also has sidechains that are designed to support several DeFi protocols that are available in the Ethereum ecosystem.

 

Internet Computer (ICP)

Internet Computer aims to extend the public internet to become the world's computer platform. Internet Computer uses Chain Key Technology that uses dozens of advanced technologies.

 

Dai (DAI)

DAI is soft pegged to the price of the US Dollar, and it is decentralized and protects investors and traders against volatility.

 

Filecoin (FIL)

Filecoin aims to store data in a decentralized way by leveraging this advantage to protect the integrity of the location of data, making it more retrievable while it is impossible to censor.

Filecoin allows people to be the custodians of their data, and it makes the web more accessible to people around the globe.

 

Stellar (XLM)

Stellar is unique because of its low transaction costs of just 0.00001 XLM. Stelar has secure partnerships with large brand technology companies as well as fintech firms.

 

FTX Token (FTT)

FTX Token is backed by Almeda Research that is known as one of the largest companies in cryptocurrency spheres, in addition to being a massive liquidity provider.

FTX Token was designed by professionals to cover a variety of services such as collateral, maintenance margin, product listings, and liquidation processes.

 

TRON (TRX)

TRON allows content creators to connect with their audiences by eliminating centralized platforms. This also ensures that creators lose less commission, which could subsequently make content less expensive for consumers, especially in the entertainment industry.

 

Ethereum Classic (ETC)

Ethereum Classic aims to preserve the Ethereum blockchain without artificially countering a DAO hack.

 

VeChain (VET)

VeChain aims to disrupt traditional support chain models and allow s for improved security, efficiency, and the ease of tracking products in any supply chain. It also aims to reduce costs by using trustless automation.

 

Tezos (XTZ)

Tezos allows participants to get involved in governance by “baking,” where they stake 8,000 XTZ, creating a financial incentive to act honestly. Tezos is also unique because it is increasingly being used by high-profile businesses.

 

eCash (XEC)

eCash is a fork of Bitcoin that has a more aggressive technical roadmap, following through on key blockchain scaling promises which were made. In addition, eCash also introduces staking, fork-free network upgrades, and subchains.

 

THETA (THETA)

Theta is involved with decentralizing video streaming, data delivery, and edge computing. This makes Theta more efficient, cost-effective, and fair for different industry participants.

 

Bitcoin BEP2 (BTCB)

Bitcoin BEP2 is a token that is used on the Binance Chain, which is 100% backed by a BTC reserve. Bitcoin BEP2's price is pegged to Bitcoin at a rate of 1 BTCB + 1 BTC.

 

Monero (XMR)

Monero's largest aim is to achieve the highest level of decentralization possible by ensuring that XMR is completely fungible. Monero offers obfuscation that is achieved through ring signatures. To ensure that transactions are not linked, stealth addresses are created for each transaction that is only used once.

 

PancakeSwap (CAKE)

PancakeSwap uses an automated market maker model. This means that there are no order books and that liquidity pools are used instead. Users can easily earn passive income by becoming liquidity providers.

 

Elrond (EGLD)

Elrond is considered ideal for a new internet economy, DApps, and enterprise use. Elrond has high scalability, and it seeks to build an ecosystem to establish EGLD as a store of value asset. Elrond allows developers to build projects on the platform, allowing them to earn 30% of smart contract fees back.

 

Axie Infinity (AXS)

Axie Infinity is a blockchain-based trading and battling game that is partially owned and operated by players of the game.

Unlike other battling and breeding games, every Axie can only be bred seven times, helping to control the population of Axies. Every Axie is a non-fungible token (NFT) that has unique attributes and strengths.

 

Crypto.com Coin (CRO)

Crypto.com is a decentralized and open-source blockchain, and the Crypto.com Chain has been developed to accelerate the global adoption of crypto, aimed at increasing personal control over money, safeguarding user data, and protecting the identities of users.

 

EOS (EOS)

EOS uses unique technology to create familiarity for users. EOS accommodates the demands of thousands of DApps, even if they are used by large numbers of people. The efficiency of EOS is driven by parallel execution and a modular approach.

 

Aave (AAVE)

Aave has unique selling points in addition to allowing people to borrow and lend 20 crypto coins, providing flash loans, and more. Aave allows users to borrow with a choice between fixed and variable interest rates.

 

Quant (QNT)

Quant has a unique operating system, namely Overledger, designed to act as a gateway for many blockchain-based projects to access several other blockchains. It also connects different applications on different levels, with levels for transactions, messaging, filtering, ordering, and more.

 

Hedera Hashgraph (HBAR)

Hedera Hashgraph introduces a novel type of distributed ledger technology, allowing for it to improve other blockchain-based alternatives across several key areas, including speed, cost, and scalability.

Hedera transactions have low transaction fees and are completed in under five seconds. IN addition, Hedera Hashgraph can handle more than 10,000 transactions per second.

 

NEAR Protocol (NEAR)

NEAR Protocol is decentralized and designed to make different apps usable on the web. NEAR can be used for fees when processing transactions and storing data, running validators nodes by staking NEAR, used for governance votes.

 

Fantom (FTM)

Fantom aims to use a new consensus mechanism to facilitate DeFi and related services through smart contracts. Its mechanism, Lachesis, aims to provide higher capacity and two-second transaction completion, with overall improvements to security.

 

IOTA (MIOTA)

IOTA is considered an extension of the growing blockchain ecosystem instead of an alternative coin. IOTA aims to work in cooperation with other platforms to form cohesion and symbiotic relationships.

 

The Graph (GRT)

The Graph brings reliable decentralized infrastructures to a mainstream market. Participants use Graph Tokens which are locked up by Indexers, Curators, and Delegators to provide indexing as well as curation services to the network.

 

Kusama (KSM)

Kusama is built for developers who want to launch bold, ambitious projects in addition to a fast evolved pace of development. Kusama is built on a multichain, with a heterogeneously-sharded design. This makes it a nominated proof of stake (NPoS) system, which is an alternative to PoW.

This system enables it to perform rapid on-chain upgrades without causing a fork. It also supports cross-chain message passing (XCMP), enabling communication with other parachains that are on the network.

 

SHIBA INU (SHIB)

The SHIBA INU website invites all dog-inspired artists to foster the “artistic Shiba movement” as the SHIBA INU community is brought into the NFT market. 

 

TerraUSD (UST)

TerraUSD is a decentralized and algorithmic stablecoin of the Terra blockchain that is scalable, yield-bearing, and has a value pegged to the US Dollar. TerraUSD was developed to deliver value to the Terra community.

It was also created to offer scalable solutions for DeFi.

 

Klaytn (KLAY)

Klaytn provides an accessible user experience and development environment. This conveys the value of blockchain technology, and the platform combines the best features of public and private blockchains in a hybrid design.

Klaytn brings blockchain technology to all users, from micro start-ups to enterprises.

 

NEO (NEO)

NEO is unique because of its continuous development, ensuring that its future-proof and can cope with increases in demands. NEO developed Neo 3.0, which enhances network security that allows for a greater number of transactions per second to be processed.

 

Is there a difference between Altcoin wallets?

Yes, there is a difference between Altcoin wallets.

There are different types of Altcoin wallets, namely:

  • Hot Wallets – which are connected to the internet and less secure, posing more risks as they can be hacked. These wallets are easy to set up, and funds are quickly accessible.
  • Cold Wallets are stored offline, and they do not need internet connectivity. Cold wallets are hack-resistant and, therefore, perfect for storing large sums of coins.
  • Hardware wallets are devices that can individually handle public addresses as well as keys. These wallets look like USB devices with OLED screens and side buttons.
  • Paper Wallets are physically printed QR-coded forms of wallet.
  • Desktop Wallets are installable software packs for operating systems. 
  • Mobile wallets are smartphone applications that use QR codes for transactions.
  • Web Wallets are accessed through internet browsers which can be hosted and non-hosted.