If you are new to Steemit and the crypto world you have likely heard the word "Altcoin" tossed around quite a bit.
However, many new comers don't actually know what that is.
At this point, most people signing up for Steemit.com know what a Bitcoin is, even if they might not fully understand exactly how it works.
However, many of these new users might be surprised to know that there are literally hundreds of other virtual currencies out there.
In fact, as of writing this, Coinmarketcap shows 747 of them with a total market cap of $107 Billion. Due to the enormous popularity right now, there are even more appearing seemingly every week.
The entire list can be seen here:
http://coinmarketcap.com/currencies/views/all/
Let's start from the beginning, what is an "Altcoin"?
The word "alt" literally means alternative and "coin", well coin just means coin. In this instance "coin" refers to Bitcoin, so "Altcoin" refers to every other coin on the planet outside of Bitcoin.
Altcoins are referred to as alternatives to Bitcoin because each one was created with the purpose of replacing or improving upon Bitcion's technology in one way or another.
In most cases, Altcoins are basically no more than Bitcoin clones, at least they were at first. They only offered minor changes to Bitcoin such as transaction speed, hashing algorithm, or possibly the distribution method.
However, now there are several that offer very distinct differences and advantages.
From ones that hope to provide completely anonymous transactions, to ones that help facilitate inter-currency payments, to ones that mine their coins via a social media blogging site (Steem and Steemit.com), to ones that offer lightning fast transaction times.
There is some real competition out there to Bitcoin.
The top couple cryptocurrencies by market cap can be seen here:
(I made sure to include just enough of them to see how our beloved Steem stacks up)
What was the first Altcoin?
Namecoin was the world's first altcoin, created in early 2011. It's primary purpose was to decentralize domain-name registration, which would make internet censorship much more difficult.
It was once a very popular coin, but now sits around number 46 on the list of coin market caps. It is actually truly a testament to how good it was that it is even still around to this day. Not many altcoins that were created over 5 years ago are still around today...
How does one invest in Altcoins?
Currently most Altcoin purchases have to go through Bitcoin. Bitcoin has established itself as the gate keeper to just about all other cryptocurrencies. Some exchanges are just now starting to allow Ether to altcoin transactions, which would place Ether as the first real challenger to Bitcoin's thrown.
In most cases in order to perform the transaction, fiat currency would be used to buy Bitcoin and then that Bitcoin could then be used to buy one of many different altcoins the exchange might offer.
There are several exchanges that have created gateways from fiat straight into their altcoin, and as the technology and space continues to gain in popularity, I would imagine we will see much more of that.
In general, Bitcoin is a very volatile asset, but Altcoins are exponentially more volatile due to their lower market caps. It doesn't take much money to really move the prices around. Keep that in mind when you are deciding on whether you should make your next altcoin purchase or not.
Do Altcoins have a future?
There are many Bitcoin maximalists that think that every other coin besides Bitcoin is a waste of time and not worthy of investment. In their eyes any other coin cannot succeed because it doesn't have the infrastructure that Bitcoin currently boasts.
However, Ethereum is proving that might not be the case for long as it has jumped up to become far and away the second most valuable cryptocurrency. It has plans of eventually overtaking Bitcoin as the top dog.
In reality, any coin could theoretically supplant Bitcoin as the top dog if enough people started using it.
That is precisely what makes Steem so interesting. Taking all the technology advantages and setting them aside, if Steem gets millions upon millions of people transacting in Steem via the exposure gained from a social media site like Steemit.com, it could make a real case for challenging and eventually replacing Bitcoin as the alpha dog of cryptocurrency some day.
Now, all of that is a long shot, but if enough people start using a Steem backed social media site, Bitcoin could be in trouble.
Hope you were able to learn something new from this post.
Stay informed my friends!
Sources:
http://coinmarketcap.com/currencies/views/all/
https://www.cryptocoinsnews.com/altcoin/
Image Sources:
https://bitbillions.com/cryptocurrency/
http://coinmarketcap.com/currencies/views/all/
http://www.coindesk.com/need-altcoins-can-get/
Follow me: @jrcornel
Great article and I'm sure this will help many.
I've been reading so many different views about the future of bitcoin, some talking about a split, and some people writing that the main problem with bitcoin is the time it takes to transfer, but just the thought of it going in the hundreds of thousands or even million is eye opening and bitcoin vs eterium which is much faster and is moving from its current platform of PoW to PoS. Which is making it very attractive at low prices, it's fun just sitting back and thinking we are sitting at the time when people were buying Microsoft or ibm shares for peanuts and were rewarded very well, here's our chance.
very good explanation of alt coins.
Follows, Resteem and upvote
When it comes to altcoins diversification is key since I don't expect all of them to survive. Etherum looks well established now though, and I have hope for a few others like Steem, Zcash, Golem etc...
@erlik 100% Agreed. Most of the coins will not be surviving in the long term. Most of them are kinda copy cat coins and do not have any real innovation behind them. Right now a lot of the altcoins are on bull runs this is due to more and more investment being made in the market as the market matures a lot of them will just die.
I think Steem , Golem , Voxels , Stratis , Monero and Ehtereum have a really bright future.
Brillant explained, the huge wave of new steemians requires such educational content, once soon we might have an even better pool for such Info, great post smd Thanks @jrcornel
It seems that every altcoin has its difficulties to scaling up, mostly the solution is POS.But it is hard to control the speed of the inflation in POS, so lastly a new altcoin will come to the market for alleviating the problem. It is just a vicious cycle....
Great post and thank you for your sharing. This is a very informative post that I can know more about altcoins. I think altcoins have high potential and the price will be even higher and higher.I would invest more altcoins in the future.
Bitcoin is currently pulling all altcoins up @jrcornel We should thank it. It's popularity means more popularity for the whole blockchain project. And when blockchain goes mainstream all altcoins along with bitcoin will prosper from it.
BTC dominance is shrinking rapidly, however it is solid. I believe a lot of altcoins wont be around for that long when the dust settles down...
Great unbiased article. I really appreciate the time and effort you put in to show many sides of the argument people seem to be on about. I think it's a true testament to the cryptosphere in general how we see less and less people use the word shitcoin as a comparison to non bitcoin coins. Again, well done article!
Great idea posting this crypto 101 lesson.
I think Bitcoin will get replaced as the gatekeeper coin fairly soon. First mover advantage will only get you so far, just ask MySpace. It's a question of by which ones.
I strongly agree...I am starting to believe this more and more each day. I think at the moment Ethereum might make the first move against it but in the end we may end up with a different top coin altogether.
And to think MySpace wasn't even first mover! It replaced friendster which was around in the 90s :0
And now lots of people don't know about either one!
Litecoin thats my boy....
Slowly the term altcoin will become a thing of the past, as the robust coins find their place in the online ecosystem. As Simon Selitsky of Coingyft summarized, "think of Bitcoin and Ethereum not as competitors, but as apex species in their respective niches, similar to lions on land and sharks in the water. Lions and sharks are at the top of their respective food chains, but not in direct competition with each other."
That being said I am also hopeful that Steemit will become a great white so to speak, a "killer platform," so that individual people and large organizations will be on a more level playing field in the inherent value of their content. Now we just need a blockchain solution to verifying fact from fiction, which I hear is already underway.
Namecoin and Litecoin were the first "alt" coins. Which one was first?
Namecoin ;)
thanks. how close were the genesis blocks mined by date? or am I not even close. (im just working off memory here and don't have the time to look it up)
That is a good question. From what I was able to find, it looks like Namecoin was released in April of 2011 and a host of others came a couple months later. I haven't found an exact date yet though.
i found it Litecoin was Oct 2011
He obviously didn't read the article, @jcornel! (unless you edited after his question?)
Great read, Alt coins are the silver to bitcoins gold! Holding a good number of them for the long term ^_^ hey thanks for sharing!
I understand diversification is important, i am still new to this and don't really know how to pick a coin to invest... Also i don't have much money to invest either, what would be a good advice?
I think the term alt coin will disappear soon. I am really starting to wonder about the strength of bitcoin, especially now after Aug 1st.
Thanks for the insight. Steem seems to have the one advantage others do not, the purposeful integration of social media.
It is crazy how much this industry has evolved over the years. Eventually crypto currency will put an end to governments ability to manage the worlds wealth and the people who use it, will dictate how much money we decide to print.
Very interesting post - I learned that Namecoin was the first altcoin. Thanks and keep up the great content!
Very good explanation about Alt coins. It will be very interesting to see which alt coins will be around the next few years. Hoping for the best.
if I may add....maybe a warning of the scammers that are out there as well....we alwasy need to be vigilant. In these days, how do you stay vigilant? What is the test?
Awesome, great work.!!
Thanks for sharing information..
Dear friend jrcornel
nice article @jrcornel
Altcoin #101. Might seem simple to many here but these are the explanations we need to get mainstream people, my father, neighbor, dentist and postman, on board and take it all to the next level.
very well written article. good explanation of what altcoins are.. take care
Thank you for this post. I have actually been wondering what an altcoin was. I found this very informative.
Congratulations @jrcornel!
Your post was mentioned in my hit parade in the following category:
Good job on the article! Hopefully Steem manages to get even more popular than Bitcoin :)
Great post jrconel. The altcoin cryptos current feature faster block time confirmations. Some altcoins even feature zero transaction fees. Great altcoins that have stood the test of time are dash, litecoin, ethereum, namecoin, dogecoin, reddcoin, burstcoin, steem, potcoin, expanse, digibyte etc... The list goes on and. The coins have many great features that make them stand out.
I will also liken Bitcoin and Altcoins to the National Grid vs Alternative renewable sources. This means they all have their Pros and Cons. But a the more the competition the more the crypto market is made healthier for the consumers.
This is a super great guide for noobies! I'm doing research for a video I am going to make soon on alt coins. Do you mind if I use this article for info? I will give proper credit and citation. My channel is small and unmonetized so I wouldn't be able to give you a cut because the earnings will be nil, but it would help your follower count for sure.
How much does the sheer volume of altcoins, ICOs, platforms and products start to muddy the waters and hinder adoption of crypto in general? Will the sheer scale be too daunting for some folks?
saw this earlier
https://steemit.com/funny/@pompe72/new-ico-for-restrooms
thanks for the post :) enjoy your day ;)
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great post ! thanks for your infos!
Gosh there is so mush to learn about crypto ,Thank you for sharing
The number one rule of investing is to spread your risk. Never go all in on one coin (yes guys even steem) because you never know would could happen.
Crypto technology has come to stay. As for Altcoins, their survival rate has increased due to the awareness that has just entered into third world countries. Many are now buying the technology, and those who are already in are future millionaires and billionaires in their local currencies.
747! Holy crap! I would not have a clue as to how to navigate through that many, I have just acquired a newfound respect for my husband who has an uncanny ability of predicting which coins are going to jump up and which will dive.
(He likes BAT's, just to let you know, an attention based coin. He feels steemit represents creativity, and has a great deal of faith in it, and your theory is not unfounded that's for sure. )
I think we'll need a terms soon. It's just a matter of time when Ether jumps over Bitcoin.
BitCoin is getting too expensive for me, and it takes too long to transfer. Hence, looking at various altcoins.
Well done article.
I think steem will be on top once the public has noticed it. Like I wrote in my initial post it might be the answer to the issue raised in the book "who owns the future". Furthermore I think it targets at two sin of people namely the pride (of posting their live in social media) and greed (for money, wealth, etc.) this makes it highly possible to become even bigger than Facebook and bitcoin together, as itself is a combination of them.
Thanks for sharing this enlightening piece, now I know better :)
Thanks for valuable info about altcoins. Can these coins be mined using cpu/gpu?
Great post. The world of altcoins can definitely be a challenge for a new player, like me.
I started blogging about my experiences in crypto so far. Please check me out and follow if you like my content.
Thank you for putting this together.