What Are Altcoins?

What Are Altcoins?

Altcoins or alternative coins are all cryptocurrencies that came after the success of the world’s largest and most popular cryptocurrency Bitcoin. The term ‘altcoins’ refers to any cryptocurrency other than Bitcoin. In early 2020, the number of cryptocurrencies reached nearly 5,000, of which 34 percent is dominated by altcoins, according to CoinMarketCap data.   

Why altcoins?

After the success of Bitcoin as the first cryptocurrency using the peer-to-peer (p2p) technology in 2008, the altcoins came to complete this success in one hand, and handle the shortcoming of Bitcoin on the other, especially as each altcoin must have a competitive feature.

Although most altcoins were mined with the same manner of Bitcoin, such coins have efficient, low-cost methodologies for processing transactions online.

Despite the joint features of both Bitcoin and altcoins, they are largely different from each other.  

Several altcoins were created using the open-source code of Bitcoin, but some are based on other codes. However, altcoins have some innovative features which encourage possessing them everywhere in the world.  

It is worth mentioning that the purpose of launching some altcoins was raising funds to finance a certain project through an initial coin offering (ICO).

Altcoins are distinguished by rapid mining that may take just 12 seconds, compared with the Bitcoin that may take 10 minutes for each block.

Other coins managed to improve the mining or distribution method, as well as the use of blockchain in storing and controlling data.

What are the oldest altecoins?

Namecoin is the oldest coin based on the Bitcoin code. It was mined using algorithm or proof-of-work (PoW) system. It is limited to 21 million coins such as Bitcoin.

Created in 2011, Namecoin aims to improve the decentralized system of Bitcoin.

The story of this coin started when some crypto enthusiasts discussed the importance of launching a more sophisticated system than the one used by Bitcoin. Thus, they developed the domain naming system (BitDNS), on which the Namecoin is based. The merged mining feature allows simultaneous mining of Bitcoin and Namecoin. This incentive feature encourages miners to mine more than one coin simultaneously. Thus, they don’t have to switch back and forth to follow whichever became more profitable.

Among the significant feature of Namecoin is that it can be used to store information in online records. Other features will be discussed later in ‘Coin Story’.

How Bitcoinists think of altcoins?

Bitcoinists claim that many altcoins may not last long compared with Bitcoin. However, their opinion is considered right in part, as some altcoins did not last long and disappeared after some of their issues emerged. Meanwhile, several altcoins have lasted long and become as popular as Bitcoin.

Ethereum, the “global, decentralized platform”, is one of the biggest competitors for Bitcoin. It is the second largest cryptocurrency in terms of market value. Sometimes, Ethereum’s daily trading volumes reach levels close to those of Bitcoin.

Another example of the altcoins is Ripple (XRP) which is solving the problems of the current banking system.

The Siacoin (SC) is also a decentralized storage platform that stores the cloud information in a decentralized manner. Thus, third parties cannot access or control the data stored on the network.

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Rabea Maguid 551 Articles
Rabea Maguid is a journalist completely obsessed with crypto industry. He holds B.A. from Al-Azhar University, and has a background in journalism and economics. Rabea Maguid likes to think about the future in a positive way, and sees blockchain as a potential driver of deep societal change.