After the Bitcoin network went live on January 3, 2009, new cryptocurrencies with different names and different functions were created as an alternative to Bitcoin . These new cryptocurrencies created were called Altcoins (Alternative Coins). New cryptocurrencies have been issued in order to provide a less competitive environment than Bitcoin. Since Bitcoin is the first crypto money and is anonymous, the competition is quite high compared to altcoins.
The SHA-256 algorithm or Scrypt algorithm, which is also found in Bitcoin, is also included in altcoins. Unlike these, there are altcoins with different algorithms such as NIST5, X11, X13, X15.
Many of the altcoins in the market have emerged as defined in the ERC-20 network, which is the Ethereum blockchain system – in order to enable new technologies that function differently to take place in the market. The transfer systems of the newly released and financially innovative altcoins are made over the ERC-20 network.
The first altcoin released was Namecoin (NMC).
The Origin of Altcoin
The reason for the emergence of altcoins is to grow the crypto money world and this sector. It is also aimed to make transfer transactions faster than Bitcoin. Mining operations are easier with altcoins than Bitcoin. Thanks to the issued altcoins, the market has become more active and faster transfer has been created in cryptocurrencies.
What Are Popular Altcoins?
The altcoin process, which started with Namecoin, has now increased considerably as a result of the launch of many cryptocurrencies. The most popular altcoins in the crypto money market; Ethereum, Litecoin, Ripple, Bitcoin Cash, Tether, Chainlink, Basic Attention Token, Binance Coin, 0x, Matic Network, Kyber Network, Enjin Coin, LTO Network, Compound, Synthetix Network Token, Bankor Network Token and Aave.
Advantages of Altcoins
- high liquidity
- There is a greater level of user and transaction privacy
- Affordable mining services are provided
- Coins with higher transaction speed are found
- Technical improvements are made to speed up mining
- Provides more investment opportunities
- Strong volatility can result in a significant increase in earnings
- Taking more concrete steps with crypto money suitable for the purpose
- Enables almost all transactions made in central financial systems in the DeFi field
Disadvantages of Altcoins
Altcoins have advantages as well as disadvantages. There are many different altcoins and each one has different characteristics.
- They can experience strong fluctuations, causing the loss to increase significantly.
- It is difficult to trust an altcoin that has not yet made a name for itself. A small mistake can cause investors to panic and even the most promising altcoin to lose value.