What Are Cryptocurrency Altcoins?
In Under 5 Minutes
You’ve heard of Bitcoin.
And you know that there are other coins like Ethereum and XRP.
However, did you know that there are thousands of other coins as well?
What Are “Altcoins?”
Any coin that is not Bitcoin is considered an “alternative coin,” or “altcoin” for short.
Some people don’t consider Ethereum as an altcoin simply because it’s so big, but most like to consider Bitcoin as “the coin to rule them all,” and everything else as an alternative cryptocurrency.
That means that XRP, EOS, DASH, Litecoin, Stellar, Cardano and all of the other cryptocurrencies are all altcoins.
Where To Find Altcoins
To see what the different cryptocurrencies are and where they rank, you head over to CoinMarketCap.com. What you’ll see is the ranking, the name of the crypto, its market capitalization, current price, volume, circulating supply, 24 hour % change, and its price graph.
Right now there are thousands of altcoins. Eventually, there will be millions of altcoins. The reason there will be so many is that literally, anyone can create a cryptocurrency, which means that anyone can create an altcoin. Something to note is that almost every altcoin is basically worthless. Some people say that only about a dozen or so coins actually have any real long-term value. Others, known as “bitcoin maximalists,” believe that Bitcoin is the only cryptocurrency with any real value.
To research different altcoins, you simply click on its name in coinmarketcap.com and you’ll be brought to the coin’s specific page. There you will see the graph of the coin and see the links to the coin’s official website plus other useful information.
There’s a “markets” tab that lets you see where the coin is being traded and how much volume is actually in the coin. There’s also a “social” tab where you can see how well the crypto company is keeping up with their social network accounts and what people are saying about them on Reddit.
Whenever you are researching an altcoin you want to go to their page on coinmarketcap and then to their official website and read about them.
Be Careful With Alt Coins
One key thing to know is that Bitcoin, Ethereum, XRP and the other coins that are higher up in market capitalization are much more stable/less volatile than the coins with lower market caps. Most altcoins have low volume (there is not a lot of money being traded in and out of them). This makes them illiquid/hard to buy or sell at a certain price.
Many coins are actually known as “shit coins” and “pump and dump” coins. These coins are usually very low market cap coins. What happens is that early investors or pump groups will slowly accumulate over a long period of time into the coin. Then, they will pump it up with huge buy orders. Other people will see that the coin pumped 30, 50, or even 80% and then they will try to rush into it, pumping the price up even further. At that point, the original people who bought the coin will sell all of their holdings and “dump” the coin on the unsuspecting victims who FOMO’d* in.
*FOMO = Fear Of Missing Out. An acronym mostly used to describe when you buy into something that is moving up because you are fearful of missing out on the gains.
Conclusion
I’ll conclude this with a bullet list.
- Alternative cryptocurrencies, also known as altcoins, includes any crypto that is not Bitcoin.
- Some are legit projects with incredible teams that are actually trying to do something useful and innovative.
- Most don’t have any long-term value. If you trade these coins, the purpose is to trade them to accumulate more bitcoin.
- To see the different cryptocurrencies that are available, go to coinmarketcap.com
- Be sure to check out the coin’s website, social accounts, volume, and other metrics to come up with a picture of how you would like to play that particular crypto.
- Be cautious of “pump and dump” scams which usually happen with low market cap coins.
Originally published at http://blog.cryptolete.com.
