An Introduction to Altcoins
We have heard about Bitcoins at some point in our daily lives and most people consider it a synonym for cryptocurrency but did you know there are many Altcoins too?
‘Altcoins’ or ‘Alt’ stands for ‘Alternative Cryptocurrency or coins’. Basically these are cryptocurrencies apart from Bitcoin.
The most popular Altcoin is Ethereum which became famous due to its smart contract and thus provides more transparency & security.
Apart from Ethereum, there are several other altcoins that have gained a position in most traded cryptocurrencies e.g. Ripple, Litecoin, Tron, Polkadot, chainlink, and Binance coin.
How Altcoin works?
To understand how altcoins work, it’s good to first understand how blockchain technology works — which is where all cryptocurrencies operate.
The blockchain network is a distributed ledger that stores data like cryptocurrency transactions, NFT ownership, and decentralized finance (DeFi) smart contracts. This ledger is often referred to as a “chain” comprising “blocks” of data, which are used to verify new data before additional blocks can be added to the ledger.
Cryptocurrency blockchain is a group of recorded transactions (the public ledger) that are organized into blocks, and cryptography connects each block to the next block. It requires all the previous transactions in all the previous blocks must be verified to append any new block. For a valid transaction, the consensus is a must but if the group wants some changes in the rule, it can validate a split in the chain which leads to a fork.
Original Bitcoin forked into Bitcoin cash. an Ethereum forked into the Ethereum Classic system. Bitcoin forked into Litcoin, Luckycoin forked from Litecoin, and very famous dogecoin is a fork of Luckycoin.
Altcoins do have the same premises as Bitcoin.This network, on which Bitcoin operates is a decentralized, trustless, peer-to-peer payment network that functions without a central authority or entity facilitating transactions. As said earlier altcoins too function on the same premise as Bitcoin: to operate using this blockchain technology.
Applications of Altcoin
Here are some applications of a few altcoins for your reference.
Ethereum is a decentralised software platform that enables Dapps and smart contracts. Over the period of time, Ethereum has transitioned its consensus algorithm from proof of work (PoW) to Proof of Stake (PoS). This modification allows Ethereum’s network to run itself with very less energy, improve transaction speed, and create a more deflationary economic environment.
Just like silver is to gold, Litecoin is to bitcoin. Since Litecoin is a fork of bitcoin, it has many similarities but Litecoin has a faster block generation system which helps to faster transaction and confirmation time.
We have received many queries on our social media that Altcoin is better in terms of investment purposes.
In our opinion, investing in altcoins could be riskier or more profitable. In case you are looking for a safe return, Minttr provides up to 30% return through our Fixed Income crypto portfolio.
Also, let us know if any crypto-related topics you would want us to cover. Write us at social@minttr.com
