What are Altcoins?
So you’ve heard about Bitcoin, and maybe you know some of the things that are unique about Bitcoin as a currency. But are you aware that Bitcoin is not the only digital currency out there?
Welcome to the world of alt-coins!
“Altcoin” is a portmanteau of “alternative” and “coin”, so altcoins simply refer to the alternative options to Bitcoin, for example Ethereum, Litecoin, Bitcoin Cash, Dash, and pretty much anything else except Bitcoin!
Before we get in to alt-coins though, let’s take a quick retrospective to understand how and why altcoins came about.
When Bitcoin was the only digital currency
The first digital currency, Bitcoin, was a ground-breaking development. For decades, people had been trying to establish a system for an electronic currency. However there were technical challenges that no one had been able to solve, particularly around how a system could ensure that each digital coin couldn’t exist (and be spent!) in two places at once.
This all changed in 2008 with the publication of a paper that set out the details of a peer-to-peer payments network called “Bitcoin”. Bitcoin was the first real solution that had ever been proposed for a digital currency that would work in the real world.
While Bitcoin was truly revolutionary, it was very much the “first generation” of digital currencies. And when you think of your first computer or first mobile phone, we know that technology can improve significantly with each iteration. Bitcoin, as the original digital currency, has some big drawbacks – most notably it is very slow, costly and energy inefficient.
But that isn’t true for all digital currencies. Many newer currencies have built on foundations that Bitcoin set and gone on to solve for Bitcoin’s limitations, or to develop entirely new ways of doing things.
What are some promising altcoins?
As of 2020, there are over 4000 different cryptocurrencies out there, and more are being added every month! While that’s probably too many to learn about all of them, here are a few of the more popular altcoins:
- Ethereum – more than just a currency, Ethereum is a platform that enables other currencies and applications to be built on top of it. While the Bitcoin network simply records transactions, Ethereum goes beyond this and enables smart contracts, ie contracts that will automatically execute when certain conditions are met, no human oversight needed!
- Cardano – Invented by one of the founding members of Ethereum, Cardano is an original blockchain that is grounded on rigorous academic research. The development is albeit slow, but each milestone increases the value of the network significantly. It is one of the best performing cryptocurrencies by far.
- Ripple – unlike most cryptocurrencies, which shy away from centralised control and formal institutions, Ripple is a semi-centralised currency that aims to work with banks around the world to make international transactions cheaper and faster.
- Solana – with a uniquely different mechanism from any other cryptocurrency,Solana enables super fast payments with almost no transaction fees. Because of its ability to process micro payments at high speeds, Solana has the potential to open up whole new economies that we’ve never seen before.
Stay tuned for our in-depth series on alt-coins. And if you want to purchase these, or other cryptocurrencies, the easiest and cheapest way to buy is right here at Easy Crypto.