What Are The Advantages of Altcoins Over Bitcoin?
Ever since it entered the world of the digital currency market in 2009, Cryptocurrency has made a shift from the less convenient and energy-requiring transactions we do way back. Cryptocurrency is a digital mode of payment done online in a mobile gadget. It offers accessible and more convenient ways of money affairs in just a few clicks away. These cryptocurrencies use digital token as an alternative to real cash.
In 2009, the first cryptocurrency among thousands of digital currencies, Bitcoin, was introduced to the world of cryptocurrencies. Now, thousands of digital transactions and other digital currencies are moving their way in the digital market known as altcoins. Other than Bitcoin, some of the top coins in the cryptocurrency industry are the altcoins Ethereum, Litecoin, Bitcoin Cash, Cardano, and Ripple.
Bitcoin is the pioneer of digital currencies that paved the way for digital transactions. But before bitcoin even skyrocketed in popularity, it was first an idea by a financially struggling pseudonym, Satoshi Nakamoto. Nakamoto, who founded bitcoin, had a vision of spending money on the internet using digital cash. Nakamoto then released Bitcoin in 2009. The first-ever transaction from Bitcoin was with Laszlo Hanyecz. Hanyecz bought himself two pizzas from Papa Johns with 10,000 bitcoin cash in May 2010. The amount of Bitcoin for two pizzas would now be worth five hundred million dollars. It shows how Bitcoin earned such success from how coins were worth from little to millions of dollars now. Bitcoin is also famous for its blockchain technology that keeps records of transactions. Overall, bitcoin remains with the highest value among other cryptocurrencies for money transactions and investment. Bitcoin is currently standing at an 856 billion dollar market cap with BTC price AUD of 61,381.59 as of writing.
Alternative coins, or Altcoin, is home to thousands of cryptocurrencies that are alternatives to bitcoin. Altcoins offer blockchain technology that keeps track of transactions. Altcoins work almost the same as Bitcoin does. The first and original cryptocurrency among altcoins was Namecoin. Unfortunately, it didn’t peak high value like the original bitcoin. On the other hand, certain altcoins such as Ethereum and Litecoin have reached high values with a market capitalization of 300 billion dollars and 11 billion dollars, respectively. Many altcoins now come up with their own rules for payment method and processing transactions.
Advantages of Altcoins
Alternative coins don’t necessarily mirror all the qualities that make up a Bitcoin. For one thing, the Bitcoin network can only mine coins every ten minutes while Litecoin mines coins every 2.5 minutes. Meaning, Litecoin can process transactions faster as compared to Bitcoin. Another better feature of Litecoin is it can generate 84 million Litecoins overall, while Bitcoin can only generate 21 million coins.
Litecoin remains one of the thousands of altcoins out there that has qualities surpassing Bitcoin’s features. Here are the main advantages of investing in alternative coins over Bitcoin.
- What differentiates Bitcoin from altcoins is that trading in Altcoins is more accessible and more effortless than Bitcoin. Because of that, there’s less competition in investing in Altcoins– allowing you to invest in just a few minutes.
- Most altcoins serve as an improved version of Bitcoin. Altcoins are created with new ideas, unique and enhanced functionalities. Its creation is, more often than not, often inspired by the shortcomings of Bitcoin. An example is Litecoin’s faster payment than Bitcoin.
- Bitcoin’s price fluctuations are a rollercoaster ride. This factor works to the advantage of Altcoins and Altcoin investors since Altcoins’ price fluctuation is lower than Bitcoin. Because of this, your invested money in Altcoin is not highly unlikely to be affected than with money invested in Bitcoin.
- The creation of altcoins enables competition among cryptocurrencies at the same time, giving different options for crypto investors. These differences provide competition among cryptocurrencies because they can change their rules. Altcoins also allow investors to have options according to their preferences and crypto function.
- Since altcoins intend to be the improved versions of Bitcoin, their costs are also cheaper for transaction and mining fees.
Although several altcoins indeed have a lot of benefits, these coins are relatively new than Bitcoin. Thus, there’s also the risk of a drastic price fluctuation. In addition, be wary of the fraudulent activities and scams around Altcoins, which can also happen in Bitcoin.
Both Bitcoin and altcoins have advantages over fiat currencies. While Bitcoin remains the top coin in the cryptocurrency industry, Altcoins can offer better and improved features than the first crypto coin. Therefore, altcoins were created aiming to provide solutions to Bitcoin’s shortcomings. Altcoins are more than just tokens since they also offer different and unique functionalities.
In investing in Altcoins, note that the wide variety to choose from has different functions. Before you get started investing, research more on these coins to know which of these are the most aligned to your preferences.