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Referring to Bitcoin cryptocurrency, many investors know the leading name in digital currency. Realizing the huge potential for growth in this field, many cryptocurrencies began to be born to meet all kinds of user needs fully, they are all called Altcoins.
What is Altcoin Overview?
What is Altcoin?
What is Altcoin? The Altcoin is a combination of two words, Alt and Coin. In this case, the Alt can be understood as an alternative form, coin means money. When combined, Altcoins are known as alternatives to coins. The alternative currency is the digital currency Bitcoin.
Simply put, Altcoins are digital currencies born after Bitcoin. Most Altcoins are encrypted from Bitcoin. Each type of Altcoin will be processed and used for different purposes.
Why were Altcoins created?
The first reason, the biggest disadvantage of Bitcoin, is the high transaction fees. So many founders wanted to create Altcoins to change this.
The strong development potential of cryptocurrencies is also the reason why Altcoins appear. Altcoins were created to exploit profits from this potential market, many Altcoin projects were born.
Which Altcoin was born first?
Namecoin (NMC) is the first Altcoin born after Bitcoin. On April 18, 2011, NMC was created by Vince.
What is the threat of Altcoins?
A large number of Altcoins currently existing in the market are, in fact, difficult to control. This involves many risks for transactions.
Altcoins are often less secure, especially those not widely used, which can be exposed to threats from criminals. Therefore, you should do your research thoroughly before making trades.
The liquidity of Altcoins, the lack of link of the actual exchange rate to the commodity or fiat currency makes Altcoin prices very volatile.
Top 6 Largest Altcoins
Ethereum (ETH)
Ethereum is the 2nd largest digital currency after Bitcoin, with a market capitalization of $21 billion. Ethereum is still a high earner in the digital currency market as an alternative to Bitcoin.
Advantages
- Ethereum is highly secure, synchronized with many industries.
- ETH has the second-largest market capitalization in the world after Bitcoin, so it is also the best Altcoin for investment choice
- ETH also uses components like DApps, DAOs (Decentralized Autonomous Organizations), and smart contracts on Blockchain, making it a flexible and useful Blockchain.
- Many projects are implemented on this decentralized platform. ETH could become a potential cryptocurrency in the long run.
Disadvantages
- ETH's scalability is limited, slow transaction times affect its status and operations.
- Vulnerable to increased competition in the digital currency market.
Litecoin (LTC)
Litecoin is a clone in a fork of Bitcoin. Litecoin can implement technical improvements like SegWit
Advantages
- Litecoin's transaction speed is four times faster than Bitcoin. For Bitcoin, the block closing speed is 10 minutes, while Litecoin only takes about 2.5 minutes to do.
- Litecoin is relatively stable compared to other Altcoins based on the Scrypt algorithm.
- The transaction fees made on Litecoin are relatively low.
Cons
- Investing in Litecoin can be risky because the agency does not regulate it.
- Since Bitcoin accepts the SegWit update, it has lost one of its most unique selling points.
Bitcoin Cash (BCH)
BCH is another permanent fork of Bitcoin. If you don't like SegWit, you can invest in Bitcoin Cash. The market capitalization of BCH is $7.7 billion.
Pros
- The transaction fee of BHC is $0.0019, you start with a transaction fee of $0.20, which is relatively lower than Bitcoin.
- BHC's transfer time is higher than BTC's, so there's no longer waiting for transaction verification.
- Bitcoin Cash has its Blockchain technology and implements an improved block size of 8MB instead of Bitcoin's block size (i.e., 1MB). This limited size can increase transaction fees but reduce transaction speed in return.
Cons
- Due to the great concern regarding the centralization of Bitcoin Cash and BHC's branding and decentralization, The distinction between Bitcoin and Bitcoin Cash is also an issue.
- Bitcoin Cash has quite a few trading pairs compared to Bitcoin, so that investors will be less restricted from trading.
- The compatibility ratio for industries can affect their growth in the crypto market.
Ripple (XRP)
Ripple is both a digital currency and a platform for streamlining international payments. Ripple is in 3rd place behind Bitcoin and Ethereum, with a total market capitalization of $18 billion in terms of market capitalization.
Advantages
- The Ripple network is highly secure, possessing several features instead of traditional banking services.
- The adoption rate of XRP is quite high among different financial institutes due to its high traceability and instant transactions.
Cons:
- Developers are the ones who decide when and how much XRP is released onion.
- Ripple Vulnerable to Token Attacks
- Despite securing trust and confidence with important investors and financial institutions, Ripple's set has a low compatibility rate.
Binance Coin (BNB)
Binance is the largest cryptocurrency exchange by trading volume. The exchange created Binance Coin (BNB) to pay fees on the platform.
Advantages
- Binance Coin offers very attractive prices in terms of transactions, when trading Binance Coin on Binance, there will be no additional costs.
- Option to use Binance Coin when trading to receive other digital currencies, reducing transaction costs.
- The value of money has increased significantly over the years.
Disadvantages
- Vulnerable to negative events that upset cash flow.
- The reduction in annual costs makes BNB obsolete in the eyes of investors if it fails to prove its worth.
Tether (USDT)
Tether is rated as one of the most stable coins; each token is pegged to $1 due to providing a stable location for traders to deposit.
Advantages
- USDT is widely used on countless exchanges, large and small, providing peace of mind for traders of all levels in times of crypto volatility
- Tether's latest feature is to periodically issue accounts, which by the way, show that a real USD in their account backs each USD.
- Established for a long time, Tether has encountered almost all internal and external fluctuations. Tether has improved and successfully overcome to confirm its position in the market.
Weaknesses
- Tether has previously been attacked because of the lack of stability in how it works and the vigilance for security. This has caused Tether to lose confidence from investors.
- In 2018, accusations of USDT not being backed by USD, no banks cooperating with Tether, etc., caused the value of Tether's coins to drop rapidly.
Introducing the 5 largest Altcoin exchanges today
Binance
Binance is widely known as one of the largest cryptocurrency exchanges in the world today. Binance is also the largest and most reputable exchange in Vietnam to buy and sell Altcoins. Here you can trade more than 100 cryptocurrencies with competitive fees and faster deposit/withdrawal speeds than other exchanges. Binance has a huge trading volume with tens of billions of dollars to up to hundreds of billions of dollars per day, along with an extremely large number of traders and investors.
Coinbase
Coinbase is also the world's largest and most popular exchange. This exchange is used by millions of users worldwide and supports the trading platform of cryptocurrencies in 32 countries. Coinbase offers many different payment methods for users based on the geographical location, the territory in which they reside. Besides, Coinbase exchange also supports strict information security from identity verification steps so that users can protect their investments safely.
Huobi
Huobi is also one of the world's largest cryptocurrency exchanges, currently headquartered in Singapore. This exchange has presented hundreds of cryptocurrencies that are enough to meet the different needs of investors. Huobi is ranked among the top ten crypto exchanges globally by volume. Besides, this is also one of the leading exchanges in terms of liquidity and reputation.
FTX
FTX Exchange was founded recently by one of the biggest Makers in the crypto market and provided liquidity – Alameda Research. Because investors and investors themselves build FTX, this exchange understands the psychology and desires of its users.
Gate.io
Gate.IO is a new cryptocurrency exchange operated by Gate Technology Inc. This exchange has been in operation since 2017, intending to capture a piece of the cryptocurrency trading market by providing its users with free access to some of the hardest-to-find coins. Gate.IO is designed with an intuitive interface that helps investors find specific information regarding their preferred coin and overall market trends.
Above is Kienthuccoin's share about “What is Altcoin? Top 5 largest Altcoin exchanges today'. The investment market is becoming more and more exciting than ever, with many attractive opportunities. Let's cultivate Thorough knowledge to achieve the desired goal when entering this market.
FAQs about What is Altcoin
Which Altcoin Should I Use?
Each Altcoin has its characteristics and features, so you need to consider your needs before making an investment decision in that digital currency.
Will market volatility decrease the value of all Altcoins?
Each Altcoin is built with its purposes, so when the market fluctuates, a few coins will decrease in value due to bad effects and some cash that increases in value.
Should it invest in some Altcoin appear on the market?
Although some new Altcoins offer many functions and attractive incentives to use, it is necessary to consider and learn the style before using it to avoid the situation of junk Altcoins created to cheat.
Is it possible to mine Altcoins?
Each Altcoin is created differently, so it cannot be mined like Bitcoin. Some Altcoins can be mined with specialized mining machines such as Litecoin, Bitcoin Cash, etc,.
