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Bitcoin still dominates the cryptocurrency market over a decade after its launch. However, other virtual currencies exist under the collective name- altcoins. Many people think of altcoins as Bitcoin variations. That’s because developers create them hoping to improve on Bitcoin’s functionality or add on its features.
Currently, the crypto market has thousands of alternative coins, with Ethereum at the top of the list. Ethereum is second to Bitcoin in market capitalization. This blog post presents a comparison of Bitcoin against altcoins. Start your trading journey by investing in a reliable trading platform such as quantum ai
Bitcoin is a virtual currency that Satoshi Nakamoto created and introduced to the world in 2009. It’s the original, successful digital cash running on the blockchain. Blockchain technology creates a digital ledger that records all Bitcoin transactions. It establishes a peer-to-peer network with many computers distributed globally.
Since the digital ledger is public, any participant can verify Bitcoin transactions on the network. Also worth noting is that the Bitcoin network employs encryption techniques to allow individuals to transact or exchange value globally anonymously and securely.
Bitcoin’s decentralization means no central entity or authority controls it. Also, it’s a scarce digital asset since its protocol stipulates the number of coins that can ever exist on the network. Miners can generate 21 million BTCs only. And this trait explains why its value increases over time.
Although Bitcoin is volatile, its price has increased to $68,000 in the past. Its market cap has risen to over $400 billion. Currently, the world has more than 19.1 million bitcoins in circulation.
Most people view altcoins as other cryptocurrencies besides Bitcoin. Developers launched most altcoins after a Bitcoin fork or another blockchain, such as Ethereum. As hinted, developers designed altcoins to address Bitcoin security and transaction speed issues. Others introduced them to enhance other functions on their blockchains.
Litecoin was the first altcoin. It was a Bitcoin blockchain fork whose launch was in 2011. The term altcoin referred to this new arrival since Bitcoin had few competitors. Besides Litecoin and Ethereum, other altcoins emerged later. These include Cardano, Solana, Binance coin, and XRP.
Other altcoins include the following:
Bitcoin and altcoins are speculative assets. That means their prices are volatile. Also, Bitcoin and alternative coins are peer-to-peer systems that people can use to purchase services and goods and as an exchange medium for digital transactions.
To purchase Bitcoin or an alternative coin, you require a digital wallet. Platforms allow you to purchase and sell altcoins. Once you buy an altcoin or Bitcoin, you can store it in a digital wallet. Also, Bitcoin and most altcoins are decentralized, meaning their transactions do not involve third parties. Additionally, no central entity controls cryptocurrency networks.
While Bitcoin and altcoins have similarities, they differ in several ways. For instance, Bitcoin has existed longer than altcoins. Also, Bitcoin’s price has remained higher than that of most altcoins. Additionally, people consider Bitcoin a store of value, while many altcoins have different capabilities or functions.
Whether you invest in Bitcoin or altcoins, always remember crypto investments have unique risks. While Bitcoin’s dominance makes it more stable and safer, some altcoins have the potential for significant returns. Nevertheless, take the time to investigate Bitcoin and altcoins to make an informed investment decision.
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