After the first cryptocurrency in the world, Bitcoin was released back in 2009,, other digital currencies soon followed. Altcoin is a generic term for all new cryptocurrency. It refers to any cryptocurrency considered to be an “alternative” to Bitcoin. Most altcoins follow the same principles as Bitcoin. They offer people interested in cryptocurrency new opportunities, just as alternative music or alternative films promise different options. Another interesting term… What’s Bitcoin?
What is Cryptocurrency, you ask? Learn More About “Altcoin”. Namecoin was launched April 2011.. It is one of the earliest altcoins. Namecoin allows its users to mine and register their domains. This will increase its resistance to censorship as well as improve anonymity. In October 2011, Litecoin was on the market.
It quickly became a fierce competitor to Bitcoin and was known as “the silver to Bitcoin’s gold”. It is possible to mine 84 millions of Namecoins, compared to 21million Bitcoins. Four main types of altcoins. There are currently more than two ,000 cryptocurrency. Altcoins are divided into four main classes: Mining-Based Altcoins The mining process for altcoins is the same as that used to mine Bitcoins.
This involves solving problems to unlock blocks. Ethereum is currently the most widely used mining-based altcoin. 2. Stablecoins Stablecoins was created to alleviate Bitcoin’s volatility. To address the volatility of cryptocurrencies, we equated the altcoin’s value to an existing fiat currency like the U.S. Dollar or the Euro.
Each altcoin is equivalent in U.S. dollars or euros. Some altcoins are equivalent in value when measured in gold. Facebook’s Libra, for example, is a stablecoin. Although it has yet to be launched, Libra is one of the most highly anticipated stablecoins. 3. Security tokens Some altcoins have ties to specific businesses.
They are introduced through an initial coin offer (ICO), and are classified as “security tokens.” These tokens, in essence, are like traditional stocks. Owners receive dividends based on how many tokens they own. NEO is a Chinese open-source blockchain project and one of the most popular security tokens. NEO has become known as China’s Ethereum.
One of NEO’s distinctive elements is the use of smart contracts. 4. Utility tokens can be confused with security tokens. They are altcoins that have a specific purpose and are tied to certain services. They are offered via ICOs just like security tokens. Utility tokens are often used to support the creation of cryptocurrency users can use for services and goods with. Although the types of altcoins are distinct, there is no shortage of altcoins that fall within each category.