Maybe you have heard this term on the internet before due to its increasing popularity within digital currencies. However, there’s much more information on what they are and why they were created.
An altcoin is a cryptocurrency that usually shares much of its code with other coins. Some are based on the Bitcoin protocol but have different parameters or use additional algorithms to achieve better security. Others go in an entirely new direction and offer features not found in any other crypto coin.
This article will provide a brief introduction on the main differences, the reasons for its creation, and their examples.
1)Main differences between Bitcoins and Altcoins
While altcoins are based on the bitcoin protocol, they tend to be more decentralized and offer faster transactions.
Bitcoin was initially released as open-source software in 2009 by a mysterious developer under the pseudonym Satoshi Nakamoto. This same technology that altcoins use, but their code is not always compatible with other cryptocurrencies because it may differ from Bitcoin.
2) Why were they created?
Since their first launch in 2011, they surfaced as an alternative to Bitcoin.
Like Bitcoin, altcoins are based on block chain technology. According to Coinmarketcap, there are currently over 1000 altcoins in existence with a total market capitalization of 17 billion dollars.
3) Types of Altcoins
There are three major altcoins:
Bitcoin – the first and most valuable cryptocurrency.
Litecoin – based on Bitcoin’s open-source code with a few changes to make transactions faster than Bitcoin.
Dogecoin – one of the more popular altcoins out there created as a joke by Billy Markus.