With all the buzz about Bitcoin, most people have heard of it, even if they don't fully understand what it is, or how it works, but not as many people are familiar with the term 'altcoins'.
An altcoin is the term given to every cryptocurrency other than Bitcoin.
The word altcoin was created from the short forms for 'alternative' and 'coin', because all of them were developed as Bitcoin alternatives after it became popular. Most altcoins have been developed to improve on elements of Bitcoin, like transaction speed and privacy, or they add useful features it doesn't have, hoping to gain a competitive advantage over it.
So far, Bitcoin is still leading the pack, but there are some very successful contenders. A few names of popular altcoins are Ethereum, Litecoin, Ripple, Monero, and Dash.
Although some Bitcoin enthusiasts think there is no use for altcoins, the very fact that they exist is healthy for the cryptocurrency sphere. Whether in sports, business, or racing, competition always causes people to strive to be the best, so new heights are reached.
We will see the development teams for Bitcoin and altcoins continue to improve things for users if they want to stay on top.
How to know which altcoins to invest in?
According to coinmarketcap.com there are now over 5,000 different altcoins, and more being developed all the time, but not all are 'created equal'. Some disappear not long after they are created, and others do very well, continuing to increase in value and popularity. There are some very good reasons for that, and anyone interested in purchasing an altcoin should know what strengths and weaknesses to look for before putting their money into it.
A good place to start is a site called coingecko.com. They are a cryptocurrency ranking chart app that helps users evaluate coins. They track a number of important facts about each altcoin, other than the current price, activity over the last 24 hours, market cap, and 7-day trend. They also give users some valuable information about the coin itself, which may help individuals in deciding if that coin is a good investment for them. Regardless of what you hear about any altcoin, you should always do your due diligence in researching about it, just like any other investment.
Money can be made in cryptocurrencies, both Bitcoin, and altcoins, but they are volatile. The most important piece of advice that you will hear repeated often is "Only invest what you can afford to lose."
Cryptocurrencies are a growing industry that is going to continue evolving and improving in it's uses and functionality. It's worth taking a deeper look into the different altcoins. Many savvy investors recommend having a portion of both Bitcoin, and a few altcoins in your portfolio.
We hope this article has given you a little more understanding of altcoins - what they are, and some of the benefits they bring to the cryptocurrency community.
This blog is for informational purposes only.
This does not imply or suggest investment in cryptocurrencies.