You are new in the crypto community, you just saw Bitcoin growing up to $12,000 USD per piece again, and you want to invest in cryptocurrency.
Even with a minimum amount of investment, just to start out somewhere, or experiment with the market, before you fully commit, you need to know where you’re going to invest and most importantly whether it would be Bitcoin or an ‘altcoin’.
Considering that you’re aware of the basics of BItcoin, we’re covering ‘altcoins’ in this article in order to give you a simple and clear headache-less explanation that defines the major differences, if any, between the two concepts.
Essentially, an ‘altcoin’ is any functioning cryptocurrency that has been created after Bitcoin, the first global digital currency. Hence ‘altcoin’ is a combination of ‘alternative’ and ‘coin’.
A more humoristic approach would be “an altcoin is to Bitcoin what Pepsi is to Coca Cola”. It indicates the chronological order in which the cryptocurrency industry was born, and as to which one is better or worse, it is for you to decide.
Most altcoins, especially first-gen blockchain-powered projects were targeting to come up with solutions to issues that made Bitcoin unreliable, as time passed and the code remained the same.
Altcoins were presented as better substitutes to Bitcoin, each trying to solve one or more problems with the Bitcoin blockchain and its functionality, therefore they were directly linked to Bitcoin in some regard.
Although not all blockchain-powered platforms are necessarily altcoins or cryptocurrencies at all, those which present some sort of an alternative monetary system, based on a digital distributed ledgers, are considered to be altcoins.
Most altcoins were similar to Bitcoin, and most of the times they were carrying many of Bitcoin’s major characteristics.
For example, some of the first altcoins to be created used pretty much the same code as Bitcoin, with minor differences that attempted to solve notable problems with the Bitcoin network.
Obviously, today, that is not the case, as more sophisticated projects popped up, not only using their own code, with their own vision, but they even have a totally different distributed ledger system, such as IOTA’s Tangle, and other unique ledgers which tend to be already solving Bitcoin’s major problems.
Yet, if any of these projects use their own native token, in the form of digital currency, it would be automatically considered as an altcoin, due to its concept of storing, distributing, and exchanging digital assets that carry monetary value, being based on that of Bitcoin.
Some would say that it doesn’t matter who came first, but who makes the job done. Indeed calling everything that is not Bitcoin an altcoin may appear as Bitcoin-oriented propaganda and in general, it is a totalitarian view in a technological sphere that has no room for ‘racism’.
Comparing the altcoin situation to the traditional monetary scene, we should see global currencies called something like dollar, alt dollar, or even alt gold, but that is clearly not the case here, as they are not participants in a cock-fight of who’s first.
They simply function well, and offer economic stability on a global scale, regardless of their respective names or bills, or country of origin. Same should be happening with the crypto scene, or at least it will when time is right.
For now, the fact that blockchain, the underlying technology behind Bitcoin, as well as most cryptocurrency projects, is not as easy and clear as required for everyone to understand, it is easier to promote Bitcoin, and its fellow ‘altcoins’, that are presented as “something like Bitcoin, but NOT really”.
Getting into the crypto sphere will eventually lead you to know how each altcoin is called, what exactly it does, how it differs compared to Bitcoin, and how should you invest in it, in case it’s just your cup of tea.