Bitcoin is the market leader for cryptocurrencies, but hundreds of rivals have combined in the previous decade to threaten its supremacy.
Since Bitcoin stormed into people’s attention in 2018, many have sought to replicate its success. These are the altcoins, essentially ‘alternative coins’. The distinction is pretty straightforward to comprehend. Simply defined, Bitcoin was the first cryptocurrency and altcoins merely stand for all other cryptocurrencies that have been produced subsequently. Altcoins is an umbrella term for Bitcoin’s rivals, whereas Bitcoin stands for, well, Bitcoin.
As Bitcoin has been achieving greater and greater heights, culminating in its greatest dollar exchange rate back in November 2021 of $64,400 to one Bitcoin, opponents in the altcoins have been investigating methods to challenge their predecessors' market domination. One of them is Ethereum, a crypto coin that has been at the front of the NFT marketplace and is the key currency used for acquiring NFTs.
Let's read beyond the definitions.
Bitcoin came into being in 2009 when the notion of a decentralized digital currency was offered by its inventor Satoshi Nakamoto, as a fictitious identity. Since then, it has become the standard for cryptocurrencies that employ peer-to-peer networks to retain a ledger of all transactions.
This peer-to-peer network is known as the Blockchain and it is the key basis upon which all cryptocurrencies are founded. It basically is a database that stores crypto-based information. What is interesting about this database is that the records are decentralized and not controlled by a third party. Once one 'block' of data has been filled, the system begins filling up another. This means there is a clear history of transactions that can't be tampered with, keeping users’ data and assets safe.
As said, altcoins encompass all cryptocurrencies that are not Bitcoin.
There are about 10,300 cryptocurrencies worldwide. These vary from little currencies that are just starting to joke coins like Dogecoin. Originally created to mock crypto users, Dogecoin became a beast of its own. It had next to no worth until the currency was picked up by Reddit, following when its value surged tenfold.
Another example is Ethereum which is often used for the purchasing and selling of NFTs. NFT stands for “non-fungible token,” and it may potentially include anything digital, including artworks, animated GIFs, tunes, or things in video games. Non-fungible indicates it is unique. The contrary, fungible, offers instances like Bitcoin. One bitcoin may be traded for another; they are identical. However, no two NFTs are the same.
Something all crypto coins have in common is that none of them are beneficial for the environment because the mining activity is highly energy-intensive. In 2017 Bitcoin consumed as much energy as the entire of Angola and given the length of time that has elapsed since this footprint can only be greater.
Crypto mining requires so much energy to make it secure; by making it prohibitively expensive for any single party to hijack the network.
For another example, The New York Times’ article states that the development of an average NFT carries with it “over 200 kilos of planet-warming carbon, equivalent to driving 500 km in a normal American gasoline-powered car.” As the world takes attempts to become more sustainable, efforts will have to be taken to make cryptocurrencies more sustainable.
Altcoins are continually seeking to establish themselves independent of the Bitcoin framework, which will allow them to have a value that is not impacted by the shifting Bitcoin rates.
Their rising popularity in the non-fungible token (NFT) market has also soared its value. In reality, Ethereum has a market capitalization of approximately USD 377 billion at the time of writing this article.
However, they are invariably followed with skepticism. Nelson Merchan, CEO of blockchain events provider Light Node Media, believes that one must take things gently and not consider altcoins as a method to generate rapid wealth. If one needs to Invest in cryptocurrency, it is always advisable to do so in the two most established currencies out there.
While Bitcoin sparked the crypto frenzy a little more than a decade ago, now there are dozens of different cryptocurrencies that investors may wish to learn about and invest in.
But cryptocurrencies aren’t like fiat currencies, like the dollar, euro, or yen. Those are physical currencies, administered by central authorities, and they all work in the same manner as a store of value. Meaning: You may trade any fiat cash for products and services. Cryptocurrencies — which might comprise different kinds of coins (e.g. altcoins, utility coins) and tokens (programmable assets) — serve several functions.