Simply put, altcoins are any other cryptocurrencies other than Bitcoin. They often share similar characteristics to Bitcoin but can also be extremely different and used for very unique tasks.
For example, some altcoins aren’t mined in the traditional sense and the platform that makes use of them will instead ask you to do small tasks or other requirements in order to earn the coins. An example of this would be the Brave Browser. You earn a crypto called BAT (Basic Attention Token) just for using their browser and viewing ads.
Bitcoin is still the biggest crypto in the world but that doesn’t mean that altcoins don’t have value or a place within the markets. According to statistics found on CoinMarketCap, altcoins accounted for just over 50% of the total cryptocurrency market and there are also well over 12 000 altcoins on the market at the time of writing this article.
Many altcoins are based on Bitcoin and the technology used by Bitcoin and so altcoin price movements tend to follow a similar trajectory to Bitcoin.
However, this is not always the case and some altcoins can become a popular choice due to their unique usage, the technology they use or because they have some sort of trait that grabs peoples attention and gets them to support and buy the coin.
Since altcoins are separate entities and apart from the Bitcoin blockchain, they are able to adapt and improve upon Bitcoin’s perceived limits and establish a unique competitive advantage.
By distinguishing themselves from Bitcoin, altcoins have been able to create an entire market for themselves. This has got the attention of many investors who can see the potential for these various coins and who expect to see profits climb as altcoins garner more traction and many more users, thus increasing their price.
The trick to investing in altcoins is to always do your research before investing in them. Does the crypto have a unique purpose? Is it safe to use? Who were the creators of the altcoin? What is the history of the crypto? Before even considering buying an altcoin, you should be doing this kind of research (and more) to make sure that the altcoin has a future and has the ability to increase in price.
Altcoins, just like Bitcoin, are here to stay and I'm sure we will see many more pop up the future. New coins are created on a daily basis and this trend isn't slowing down. In fact more and more are popping up as time goes by. Cryptos are the future of finance and altcoins will have a huge role to play in that future.
Are you interested in buying your own altcoins? We recommend that you use VALR, South Africa's biggest crypto exchange.