Bitcoin has been the king of the game since everything started because it was the first type of cryptocurrency that arrived in the market. Without a doubt, Bitcoin has changed the game when it comes to the financial market.
Over the past few years, this market has grown, as blockchain evolved so did the number of cryptocurrencies available, and that’s when altcoins came into the game. As their name says, altcoins are alternative coins different from bitcoin whose value has become bigger over the course of the last few years.
According to Investopedia, “Altcoins are the other cryptocurrencies launched after the success of Bitcoin.” Generally, they sell themselves as better alternatives to Bitcoin. The term “altcoins” refers to all cryptocurrencies other than Bitcoin. As of early 2020, there were more than 5,000 cryptocurrencies by some estimates. According to CoinMarketCap, altcoins accounted for over 34% of the total cryptocurrency market in February 2020.
The data mentioned above shows us how the success of one simple type of cryptocurrency such as Bitcoin has opened the path for different alternatives in order to shake up the status quo of the current market.
But what are the actual differences between Bitcoin and Altcoin? Well, Dchained, an educational platform for crypto investing is here to help you out. We are glad to share some advice from professionals who can guide you along your investing path. Remember that it is important to have some guidance at the moment of starting your career in crypto.
First of all, Bitcoin was developed to decentralize digital currency that could eventually replace fiat money like the dollar and the euro. This was done by using mining transactions which are considered an intensive and expensive resource. On the other hand, Altcoins use a different mechanism to make mining less complex, for example, there are some Altcoins who have been used to develop apps to make their transactions.
Secondly, as Bitcoin was the first one in the market it has a larger user base, and it is more appealing for new investors due to its market cap. This has allowed developers to work around this cryptocurrency and add new tools and functionality over time. When it comes to Altcoin there are new users who decide to build on the existing Bitcoin architecture, adding new features that make the currency more usable in various situations.
Finally, even if Bitcoin could eventually be capable of doing everything Altcoins can, the reality is that it still benefits from the competition. As of yet, blockchain is a young technology that requires a thriving ecosystem to truly develop and become valuable to society. Moreover, Bitcoin could do well to avoid feature creep and lose its value. The beauty of blockchain is that it allows for cryptocurrencies to be used for much more than just paying for things.