When cryptocurrency or decentralized finance is brought up, many people think first of Bitcoin. Bitcoin (BTC) is often held up as the progenitor of modern cryptocurrency, and currently comprises approximately 47 percentof the entire crypto market — a higher dominance than any other currency.
At the same time, the rate of altcoin launches has grown exponentially, with some estimates reaching 6,000 varieties. Although altcoin shares several characteristics with Bitcoin, each altcoin ultimately operates under its own rules. Compared to Bitcoin, some altcoins are capable of faster transaction processing, higher transaction volume, or better scaling; others offer advanced functionality such as automated ‘smart contracts.’
New functionality notwithstanding, there remains the question of the extent to which altcoins disrupt the market. Are they capable of challenging the status quo in the crypto space? Disruptive or not, what opportunity might altcoin represent for investors?
To address these questions, we must first take a closer look at altcoin itself — what it is, how it works, and what it can do.
What are altcoins?
Altcoin is functionally a catch-all portmanteau for any form of cryptocurrency that isn’t Bitcoin. Given the sheer number of available altcoins, their value and functionality tends to vary significantly. They range from potential “pump-and-dump” clones such as Bitcoin 2 to newcomers like Cardano, Polkadot, and Avalanche.
What do altcoins and Bitcoin have in...
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