An altcoin basically refers to the alternative of the Bitcoin cryptocurrency. The founding currency that ushered the birth of the crypto industry has been Bitcoin in 2009, what altcoin simply means is any “alternative coin” to the Bitcoin crypto asset.
What are altcoins
In other words, you could say that altcoins are other cryptocurrencies that are not Bitcoin. These altcoins can be said to differ from the Bitcoin cryptocurrency in different ways. Others have different economic models, algorithms, network structures etc. Others too, share the same protocol and algorithm with the Bitcoin network. Interestingly, the term which is “altcoin” happens to be an abbreviation of “Bitcoin alternative”. Often times, they have been referred to as altcoins because most of them seek to either modify or replace some of the core components of the Bitcoin network. According to CoinMarketCap, there are over 1,300 altcoins that are actively trading on the crypto market.
You would find it interesting to know that “Namecoin” is the first altcoin that was developed and launched on the crypto market. This altcoin was launched in 2011 and seeks to decentralize the registration of domain names. The Namecoin altcoin was developed on the Bitcoin protocol as well as on the same algorithm of the Bitcoin network.
Most of the altcoins were developed after the market success of the Bitcoin network. We will take a look at some of the best altcoins that have been developed. They include;
The Litecoin network happens to be one of the most successful altcoins in the market. It was developed by Charlie Lee. It happens to be not just an alternative to the Bitcoin network, but also a more advanced version of the Bitcoin network. While the Bitcoin network has a block size of 1 MB, the Litecoin network has a 2 MB block size. Meaning twice as much transaction data can be stored at any given instance on the Litecoin blockchain compared to that of Bitcoin. On the Litecoin network, transactions are faster, this not only makes the network a sought-after one, it might also make the network’s blockchain larger thus resulting in the production of orphan blocks. These are transaction chains on any blockchain where no consensus of the network has been achieved.
Ethereum happens to be one of the most sought-after altcoins in the crypto market it has often times been compared to the Bitcoin network. Ethereum is a decentralized cryptocurrency network that seeks to offer third-party developers the opportunity to create decentralized applications otherwise called DApps. The Ethereum network was developed by Vitalik Buterin and was launched in 2014. The Ethereum network has integrated smart contracts to ensure that all crypto network users can carry out seamless transactions without fear of being cheated.
The Ethereum network happens to currently be the second most valuable cryptocurrency in the world and at the same time is the most valuable altcoin that has been developed. Ethereum is more than just a currency, it is purely a decentralized network that was designed specifically to offer solutions to some of the real world problems. The network is powered by the Ether token.
Ripple is one of the altcoins that is capable of solving real-world problems. The Ripple network was designed specifically to ensure that people are able to carry out seamless, fast and cheap transaction across borders. The network was developed to solve some of the problems that are facing the traditional financial institutions. Ripple is not your typical crypto startup as it has a centralized authority managing its network. Unlike the financial institutions that take days before transactions are processed, the Ripple network does not take long before transactions are carried out. The Ripple network is currently one of the fastest crypto networks in the market and this has endeared most crypto enthusiasts to the network.
The Ripple network happens to be a unique network in the sense that it allows users to carry out transactions in any unit of value. With the network’s XRP token, the network is able to offer financial global settlements solutions to ensure that users are able to carry out transactions as fast as possible at low cost.
This network has grown to be one of the most valuable altcoins in the crypto market and it is a combination of the two words “digital” and “cash”. This altcoin seeks to offer crypto users instant transactions, unlike anything you have ever seen. Currently, the Dash network has been recorded as one of the fastest crypto networks in the world. The network offers “InstantSend” which verifies transactions in seconds. According to the developers of this network, it is claimed that while the Bitcoin network verifies transactions in an hour, the Dash network happens to do that in seconds.
Like the Bitcoin network, the Dash network makes use of the proof-of-work algorithm. This means that users would have to make use of specially designed ASIC miners. Using these specially designed miners would offer users on the Dash network the opportunity to compete for blocks to ensure that they earn rewards.
The NEM protocol was written in Java and happens to be built on an entirely new codebase apart from the codebase of the Bitcoin network. One of the main differences between the Bitcoin network and the NEM network is that while users mine on the Bitcoin network, harvesting is done on the NEM network. It is not quite different from the mining process, the difference is that more people are able to benefit from the blocks that are generated on the network.
Also, the NEM network makes use of the proof-of-importance algorithm, unlike the Bitcoin network that was built on the proof of work algorithm. The possession of users on the network would determine the time transactions are being verified. This altcoin has seen a drastic increase in value in the last year and also has become the sought-after cryptocurrency in Japan (although NEM has suffered alongside much of the crypto markets with considerable loss in value so far this year).
This altcoin was developed specially for those who seek to carry out anonymous and private transactions. With the technologies and mechanisms that have been put in place, all transactions that are carried out are untraceable.
We have discussed some of the most popular in the market as well as see how each of them is different from the Bitcoin network. The Bitcoin network was developed by Satoshi Nakamoto in 2009, which has gone on to be the most valuable coin in the market at the moment. These altcoins listed above are designed either to outdo the Bitcoin network or improve on its core components.
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