What Is An Altcoin?
Every time a new concept or product is unveiled and released in the market, it only enjoys autonomy for a short while, because competition starts the minute the idea falls into the public domain. Such was the case with bitcoins – from the day the cryptocurrency was hinted by Satoshi Nakamoto in 2009, brains started rolling to look for other forms of virtual currencies. Altcoin, consequently, refers to all the other coins that have been developed as alternatives to bitcoins, which stand at about 150 alternative coins at the moment. These alternative coins are simply referred to as altcoins.
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What are some of the alternative coins?
The more than 100 alternative coins to bitcoins include: Namecoin, Litecoins, Bytecoin, Feathercoin, Freicoin, Dogecoin, Huntercoin, Novacoin, Valutacoin, Peercoin, Devcoin, Earthcoin, Goldcoins, and many others.
Why go for alternative coins?
While the coming of bitcoins was full of promises and brought about a revolution in the financial world, it was not without it’s share of challenges and limitations. The reason behind the altcoins was to, on one hand, improve on the weaknesses of bitcoins, while on the other hand, fill the gap with what could be missing on bitcoins.
For instance, the developers of bitcoins stated that, from the word go, once the mining process comes to a halt, there will only be about 21 million bitcoins in circulation. It has even been speculated that, to avert this crisis, the bitcoins will then be divided into smaller denominations, called satoshis. The many companies that have come up with various altcoins endeavor to double or triple this amount, and where possible do so twice. The idea is to ensure that the common man and business persons are not limited by the number of coins in circulation – the more, the better.
On the other hand, the explosive nature of bitcoins has become quite unpredictable, making it rather challenging for people to invest in the currency. For instance, there are times 1BTC would be exchanged for as high as a thousand dollars or more, while in other cases this would drop by almost 80%. By bringing more and more alternative coins into the market, it is hoped that this kind of volatility would be stabilized, bringing it down to an exchange rate of one coin to about fifty dollars.
The other main point of concern has been the time taken to process a transaction involving bitcoins. The truth of the matter is that bitcoins, by themselves, have a real fast transaction time, compared to other cash currencies around the world that are transferred through wire transfer in banks, financial organizations and so on. However, the developers of altcoins noticed a point of weakness, wherein it could take up to ten minutes for a simple payment to be processed, which could be rather annoying in the event you wanted to pay for a soft drink or a snack. Some of the altcoins that were developed to curb this crisis can be processed through the block chain in less than a minute, therefore speeding up the rate of doing business. This way, customers can have an efficient service delivery, while businesses can pride themselves in higher turnover rates. It is even joked that, if you ever wanted to buy a vehicle, use bitcoins, but if you wanted to buy a burger, make use of altcoins!
The same way credit cards have become popular around the world in offering different products, so are the altcoins – you are at liberty to use different altcoins in different business premises, especially those that allow payments to be made using more than one alternative coin. It’s called the freedom of choice, allowing you to suit your own needs with each situation.
You can get a better a better glimpse of each altcoin by checking the online reviews and their pattern in the stock exchange, the legality of the coins in various states, and your accessibility to each respective cryptocurrency.
One thing is certain: things will only get better in the coming days, as bitcoins and altcoins infiltrate the markets around the world. Who knows – soon we might have the crypto coins acceptable globally. Until then, only time will tell.
Want to learn more? Read out other articles!
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- Bitcoin And Consumer Protection
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