As the Bitcoin trend is emerging, I’m pretty much sure that you must have heard about Cryptocurrencies and Altcoins. You might have heard in the news or through some websites or you just explored it by yourself. Maybe you don’t know where to start with or how to use it.
No worries!! Here is the detailed step by step guide, specifically for you. As you will get everything right from the initial setup to buying your first coins.
Let’s get started…
What Are Altcoins?
In this era of cryptocurrencies, although Bitcoin is the king in the town there are various other cryptocurrencies as well. Basically, the term Altcoin is the short form of Bitcoin Alternative which describes all the decentralized digital currencies along with Bitcoin.
With the major cryptocurrencies like Bitcoin, Ethereum, Litecoin, & Ripple there thousands of altcoins invented till date. Although thousands of altcoins were available, most of them did not survive for a longer time.
Origination Of Altcoins
It was 2009 when Bitcoin was created and just after two years, the first Altcoin came into existence. Later on, the rate of Altcoin emergence increased in the years 2013 and 2014. In fact, it continues to increase even to date.
Let’s dive deeper into the story of various other altcoins….
The first Altcoin, Namecoin originated in the year 2011, approximately two years after Bitcoin. Basically, it aimed to replace the domain name system in a decentralized way.
Sometime after the emergence of Namecoin, Litecoin was also born in 2011. For several years, the coin maintained its second position after Bitcoin. Litecoin differed Bitcoin in terms of its mining-puzzle. While Litecoin uses a memory hard mining puzzle, Bitcoin uses a computation hard one.
It was the end of 2012 when the PeerCoin originated in the market. Basically, this coin uses quite different mining puzzle which is the proof-of-stake. Peercoin allows making transactions using coins, the miner owns.
Dogecoin came into existence by the end of 2013. Basically, Dogecoin originated with the aim of having fun with cryptocurrencies. As Dogecoin performed various marketing campaigns and public events, it gained publicity in a very short term after its launch.
The origination of Ethereum took place at the beginning of 2013. This coin allows the creation of smart contracts in Turing, which is a complete programming language. Smart contracts are computer programs, which are installed on the peer-to-peer network. For smooth processing, they “pay” the computational power required through a token, called Ether. Eventually, this acts as both cryptocurrency and contract fuel.
You might be aware that Bitcoin provides only pseudonymity. Hence, it does not suit the monetary exchanges with high privacy. Additionally, Monero is fungible. Hence, each coin is totally identical to every other coin in circulation.
The altcoin, Cardano is a decentralized public blockchain. Basically, this coin aims to protect user privacy along with allowing regulation. Cardano is the third generation cryptocurrency which originated in 2015. It was at the start of 2018 when Cardano entered the Top 5 Market Cap Cryptocurrencies.
Ripple came into existence in the year 2012 with the aim to help authorities and not to substitute them. It also aims to do for payments what SMTP did for email, which enables the systems of different financial institutions to communicate directly. Ripple network allows payments in XRP or in fiat currency.
How To Choose The Best Altcoins To Invest?
The task is always easier when you choose a project that has good potential. Moving further, check with the history of the coins. Whether the founders are anonymous or are their identities disclosed. It is only after extensive research you can invest in any altcoins.
Make sure you glance through the discussions in the forums or in the Facebook groups before investing. These are the areas which provide the most trusted information.
Owning and trading altcoins require an exchange supporting them. Basically, some altcoins are traded in exchange for Bitcoin, while some others for Ethereum and Tron, and some others for FIAT – USD and Euro. Eventually, the altcoins are traded to receive rewards. As the crypto market is quite volatile, you have to be quite cautious while trading.
Tips To Trade Altcoins
Prefer To Invest In Best Technologies: Maybe you’re a day trader or a long-term investor, you should select the best coins for your portfolio. You are allowed to add or remove these coins as per your strategy, but not on a daily basis. Hence it is preferred to choose coins that have a strong technology backing them.
Examine The Vendor Carefully: Be sure about the website outlook and the team behind the coin. Carefully the whitepaper as it tells you about what technical problems the company has and how will it solve it. Also, check out their social media profiles for existing users on Reddit, Telegram, Instagram, GitHub, and 4Chan.
Analyze The Trade Volumes: Coin’s trade volumes are available on Coinmarketcap. Basically, the Trade volume tells you how much has been transacted over the past 24 hours. While it gives detailed analytics about the previous trends, coinmarketcap does not predict any future circumstances.
Always Be Familiar With The Chart Patterns: Suppose you invest $1,000, every day resulting in 1% gain consistently per day, then your investment will be worth $37,783 at the end of the first year. Similarly, it will be $1,427,587 by the end of the second year. If you become a pro at trading, then a 1 percent gain every hour is achievable.
Investigate Historical Trends:It is always better to examine historical trends and expert reviews prior to buying. Especially this is critical for coins that do not have tons of followers or where the source of information is hard to come by.
Summing It Up
Sometimes altcoins are seen as projects from enthusiasts perspective and sometimes as a whole new business. Also, they can even be something other than coins. Having a complete transformation into new frameworks for everything right from messaging applications to online marketplaces. It is also possible for niche traders to make returns by exchanging altcoins with each other. It is always preferred to do proper research before involving any altcoin.