Many of these companies have been created due to the rapid rise in popularity of cryptocurrency. They offer investors options, but they can also cause anxiety. It is important to know the differences between the two types of cryptocurrency, given their relative newness.
There are basically two types of cryptocurrency: Bitcoin and Altcoins. Bitcoin is the most popular crypto due to its dominance. The blockchain technology that is the basis of cryptocurrency, has matured and led to the creation of many new crypto coins, such as Ethereum. These coins were called “altcoins”, short for alternative coins.
Altcoins are built on the same principles as Bitcoin, but have some unique features and additional features.
What is Bitcoin?
Bitcoin, the first cryptocurrency, was created in October 2008 and launched in January 2009. It was created by a pseudonymous individual or group known as “Satoshi Nakamoto.” Bitcoin is an open-source, peer-to-peer decentralised digital currency. All transactions are recorded into an online public ledger accessible to all. To facilitate transactions, it doesn’t require an intermediary like a bank or other financial institution.
What is Altcoin?
All other crypto coins, except Bitcoin, are generally called “Altcoins”, which basically means an alternative to Bitcoin. CoinMarketCap is a market research organization that lists more than 11,000 crypto currencies. These are all altcoins.
What is the difference between Bitcoin and them?
Altcoins are based on the success of Bitcoin, but have slightly modified the rules to appeal more to certain users. Ethereum, which is the second largest cryptocurrency in terms of market capitalisation, introduced smart contracts. These smart contracts are codes that only run when certain conditions are met.
These smart contracts execute agreements between two parties using Blockchain technology, opening up possibilities for the development and testing of new crypto applications.
Altcoins offer improved functionality, transaction and scaling to meet rapidly growing demand. Many wonder if altcoins will be able to match the success of Bitcoin and the other coins that followed it. Bitcoin is the original cryptocurrency, and all other coins are ‘Altcoins.