Altcoins: what are they and why are they underestimated

Olena Dubchak

Olena Dubchak

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May 8, 2020
15
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Cryptocurrencies are more diverse than ordinary users can imagine. Of course, bitcoins, etherium and other tokens that are in the TOP-10 are constantly on the list, but there are hundreds of altcoins that have never achieved popularity. Here we will find out what these tokens are and why they are not trusted by traders and investors.

What are altcoins for teapots?

The name altcoin combined two words: "bitcoin" and "alternative". Each cryptovalues released after BTC became an altcoin, i.e. an alternative. However, only the airtime can compare to bitcoin in popularity. At the same time, it costs around several hundred dollars, while BTC - a thousandand.

The Altcoins were created by the decentralization of the block system. Everyone could take it as a basis and create something new. That's what the founders of the airwaves did, developing their own platform with smart contracts. Other altcoins tried to achieve the following results:

· Algorithm corrections for faster mining. As a result of modernization, there is PoS Mining. We will talk about it briefly below.

· Maintenance of the system decentralization with experiments optimizing the program code.

· Development of a technical framework that makes technology as independent as possible from the government or its individual major organizations.

At the same time, altcoins seek to ensure the anonymity of system members, confidentiality of transactions and wallets.

Why is Bitcoin still in the lead…

The peculiarity of the cryptographic currency is the formation of price on the basis of supply and demand. In its turn, the first arises when there is confidence in the digital currency and a desire to get it. Bitcoin provided these conditions, because:

· At the time of its price peak, it was completely safe. However, time has shown that even transactions in bitcoin can be tracked. Therefore, other tokens started to be used to maintain maximum anonymity.

· The price has increased significantly due to its distribution.

In 2009, only a few people knew about Bitcoin. Many started mining tokens just for fun and did not worry about losing the crypto wallet data. But with the spread of the Blockchain technology, when companies began to notice the benefits of its use, the mining of cryptographic software also expanded. After all, the number of transactions increased. This led to even greater demand and growth in price. Also, the increasing complexity of mining has played a role, making production more expensive every year.

What about the altcoins?

Alternative cryptocurrencies used 2 development paths, depending on the selected algorithm. Most went for bitcoin and mining using the computing power of the equipment. However, many are so similar to the first token that they get lost in the variety of cryptomonet.

Other cryptovalues have chosen the PoS algorithm. There is no mining as such. And receiving rewards is provided for storing a share of tokens in a frozen account, which is designed to provide the system with the necessary power. In this case, over time it remains unchanged

. Altcoins are less credible because they are not as attractive to the consumer: bitcoins are recognized in some countries as a means of payment, while altokines have been left out. The popularity is also affected by market value, price rise and fall, capitalization, etc.
 

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