Alt Coin is Alternative Coin, Here's the Explanation!

Alt Coin is an abbreviation of the term cryptocurrency, namely alternative coin. Literally, altcoins are alternative coins. However, what is an alternative coin in the context of cryptocurrencies?

This time, VCGamers will fully discuss alt coins in the crypto context. Come on, see the discussion below!

Also Read: Advantages of The Merge Ethereum, Faster!

Understanding Alt Coin Is Alternative Coin

Alt Coin Illustration Is — Altcoins illustration. Source: Kanchanara via Unsplash

Altcoin is one of the terms in the world of cryptocurrency as a description of cryptocurrencies other than Bitcoin.

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This type of altcoin was first released in 2011, which has the aim of improving aspects of Bitcoin.

These aspects are energy efficiency and transaction speed. However, currently new altcoins that have sprung up have goals in accordance with those of the altcoin developer.

In general, altcoins sell themselves as an alternative to Bitcoin. At the beginning of 2020, there were more than 5,000 cryptocurrencies and altcoins had more than 34% of all cryptocurrency markets.

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Altcoin and Bitcoin Similarities and Differences

Bitcoin and Alt Coin Are — Bitcoins and Altcoins. Source: Kanchanara via Unsplash

Created as an alternative to Bitcoin, altcoins have many similarities and differences with Bitcoin. This happens because both of them are coins or crypto assets.

One of the similarities between altcoins and Bitcoin is peer to peer transactions. Then, they also use the private key when a transaction occurs.

In addition, of course, they both have Blockchain features that record transactions for the two types of coins. The recording of these transactions is open to the public and permanent through the ledger.

There are also differences between altcoins and Bitcoin. With the increasing popularity of crypto asset investment, altcoins also offer a variety of offers such as various advantages and features.

So, the difference between altcoins and Bitcoin can be in the form of more features such as mining fees and transaction speed. Apart from that, the amount of altcoin availability is also a differentiator from Bitcoin which has limited availability.

Usually, altcoins have no availability restrictions. In contrast to Bitcoin which has limited availability so the price of Bitcoin is quite high.

Also Read: Bitcoin Is The World's Oldest Crypto, Here's The Explanation!

Main Type

Alt Coin Type Is — Illustration of Altcoin and Bitcoin. Source: Alesia Kozik via Pexels

According to The Motley Fool, There are four main types or types of altcoin cryptocurrencies. There are stablecoins, mining-based, staking-based, and governance. This type is divided into four according to the way the altcoin works and the purpose.

Stablecoin is a cryptocurrency whose goal is to follow the prices of other crypto assets. The majority of the largest stablecoins adjust to the US dollar and attempt to match their value.

In addition, there is a type of mining-based. This mining-based coin is crypto money that has a process mining to verify and add coins to the supply.

Staking-based coins are cryptocurrencies that use processes staking. Staking is a transaction verification process that adds more coins to the supply.

A person holding a staking-based cryptocurrency can stake coins. Betting the coin means that they pledge the coin as a transaction process.

Token governance is a crypto currency as a voting rights holder that helps to realize the future of a project.

This token allows anyone to vote on crypto-related proposals.

This helps cryptocurrency as a decentralized project, because the holders of the asset have a voice and decisions are not from a central authority.

Altcoin example

Example Alt Coin Is — Ethereum as an Example of an Altcoin. Source: Moose Photos via Pexels

After learning about the types of altcoins, here are examples of altcoins that are popular and widely circulating in the marketplace.

First, there is Namecoin which was released in 2011 so this coin is the first altcoin. Similar to Bitcoin, this altcoin has a supply limit of 21 million coins.

Besides that, Vicigers definitely knows Ethereum. This altcoin was released in 2015 and Ethereum is a crypto asset that offers the first programmable Blockchain. Currently, Ethereum is the largest cryptocurrency after Bitcoin.

Another example is Litecoin. One of the advantages of Litecoin is that users can make transactions faster even though they don't have an extraordinarily powerful computing system. Thus the discussion about altcoins.

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