Bitcoin And Altcoin: (What Is The Difference).
Bitcoin and altcoin is a coin that has gained recognition in the world of crypto, there are
more than 19,000 cryptocurrencies in the digital world, these currencies are divided into
two, Bitcoin and Altcoin.
However, the question a lot of people asked after knowing that they are two forms of
cryptocurrencies is, what is Altcoin? What is the difference between Bitcoin and
altcoin? These questions will be addressed in this article.
What Is Bitcoin?
Bitcoin is one of the decentralized digital currencies used for exchange, that is, buying
and selling in the digital market without a third party like physical banks.
Bitcoin is the first ever cryptocurrency that was created by Satoshi Nakamotoshi and
launched publicly in 2009, the transaction of Bitcoin created is based on cryptographic
proof instead of trust like the physical banks, that is to say when you leave your money
with physical banks, you do that base on some level of trust, but Bitcoin brought to
the digital world a way of performing transactions and also being involved in the whole
process (not putting eggs in one basket).
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How to buy Bitcoin
One of the most valuable coins today in the world of crypto is Bitcoin, this coin is valuable
because from the year it was created till now, it has increased in potential and use, it
was the breakthrough of bitcoin that draws attention to digital currencies, and also
brings about the emergence of different types of coins.
A lot of people buy bitcoin in Cryptocurrency exchange, and exchange is a platform that
helps you buy, sell, and hold cryptocurrency, there are different exchange wallets today,
examples are: Coinbase, Gemini, etc. For you to buy and hold Bitcoin or perform any
transaction with it, you need to sign up with any exchange wallet or get a bitcoin wallet.
What is Altcoin
After the creation and launch of bitcoin in 2009, a lot of coins started arising, this coin are
called altcoin.
In this light, Altcoin is any coin that was created after the launch of Bitcoin, Altcoin is a combination of two terms, which is alternative and coin, in simple
explanation, Altcoins are those coin that is not Bitcoin, this means that all the cryptocurrency than exist in the crypto world are Altcoin except Bitcoin. Some people consider altcoin to be different from Bitcoin and Ethereum, while others consider Ethereum as one of the Altcoin, the reason for this is that most cryptocurrencies are forged from either of the two.
Read Also: Ethereum’s Price Experiences A Spike Following The Whales’ Deposit On Exchanges
What to note about Altcoin
You should note that the value of Altcoin in the future is unpredictable, this is because of how volatile cryptocurrency is, the value of a coin can continue to appreciate if the Blockchain they are built in is consistently developed and used by people. There are thousands of Altcoins on the market, However, each coin is not the same as the others because different coins are created for different purposes.
Kinds Of Altcoin
Altcoins are created in categories depending on the intention of the creator. Below is a recap of some varieties of what Altcoins are used for.
Stablecoins
Stablecoins is a type of coin that creates an avenue for stable price in the market, the process of the stable always involves pegging the token into a bag of their desired goods, like fiat currencies, valuable metals, or other cryptocurrencies, what this means is that the bag represents a bank that the holder of a coin can run to if the cryptocurrency ceased to be effective.
Payment Token
A payment token is a type of coin that is used for transactions. It is created to be used for exchange between two parties.
Security Token
This type of token can be referred to as a tokenized asset that is offered in the stock market. What then is Tokenization? It is a process whereby value is transferred from an asset to a token to be made available to investors. For you to tokenize an asset, you have to hold the asset, and secured it, this will make the asset have value, the type of token called security token is controlled by the security and exchange commission.
Governance Token
This is the type of coin that allows the holder to have certain privileges in Blockchain. Governance tokens are the type of token that originates from a private blockchain and is used mainly used for blockchain purposes, they can also be regarded as utility tokens. However, because of their purposes, they have come to be accepted as a different type of coin from utility tokens.
Utility Token
The type of coin which is used by a user to perform transactions and other types of services around a network, the primary purpose of this coin is to:
- Pay Network fee
- Redeem rewards.
One Example of a Utility token is Ethereum because it allows a user to use it in performing transactions in the Ethereum network. It is possible to buy a Utility token and hold it, but the main purpose is to use it on the Blockchain Network to pay for transactions.
Meme Token
This is a type of coin that can easily gain Online attention, meme coins are coins that represent jokes on a well-known cryptocurrency. One thing that brings popularity to meme coins is investors, and influencers, they hype the coin in a short period of time to get their gain.
Conclusion
Even though there are two types of cryptocurrencies, the value of the two coins might not be the same, but the activities of both coins are the same, in the area of buying, holding, and selling it off Any new coin that is created today can not be categorized under Bitcoin, but Altcoin.
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Meet Daniel Abang: Crypto guru, content creator, and analyst. With a deep understanding of blockchain, he simplifies complex concepts, guiding audiences through the ever-changing crypto landscape. Trusted for his insightful analysis, Daniel is the go-to source for staying informed and empowered in the world of cryptocurrency.
