What are altcoins and why are they important?
So we have learned about cryptocurrency and its basics. You can find that blog by clicking here. Now we are moving towards Altcoins and its importance. You must have heard about cryptocurrencies other than bitcoin. Ethereum, we can bet that you must have heard about this coin because of its potential and You must have watched memes about SHIBA and DOGE. These cryptocurrencies other than Bitcoin are called altcoins.
Altcoins are very much similar to bitcoin in the sense that they are also peer to peer digital Money but they have some significant differences in their working mechanism as well. The main reason altcoins are important is because they provide a decentralized and secure Alternative to government-issued fiat currencies. They provide a way for users to bypass Banks and other financial institutions.
Unlike traditional currencies like the U.S. dollar (USD) or the Australian dollar (AUD), altcoins offer a number of benefits over traditional Currencies. For example, altcoins are not subject to government control or inflation. They also tend to be more secure than traditional currencies. Since they are traded independently of any government or bank, they also allow users and holders to remain Anonymous. This makes them perfect for making purchases online and avoiding fraud. In addition to providing anonymity and security, altcoins also tend to be much cheaper than Traditional currencies.
Types of altcoins
You are a crypto trader then you should know about each and every type of altcoins that exist in the market right now but we are sure that you don’t have sufficient time to research on all those cryptocurrencies. So, why not we focus on some of the major types of altcoins there are out there in the crypto world right now.
Protocol tokens, App tokens and meme tokens are major categories of altcoins.
Protocol coins are similar to bitcoin in that they are digital tokens that use a blockchain technology. They can be used to pay for transactions on the blockchain. The biggest difference between bitcoin and protocol coins is that protocol coins can be used to pay for transaction fees within the system.
In most cases, protocol coins cannot be used for any other financial transactions outside of the network in which they are used. There are some exceptions to this rule though. These coins are rewarded to the miners who provide the computing power to run the blockchain. While protocol coins are not as popular as bitcoin, they still play an important role in the
App tokens are tokens that are used to power applications on the blockchain. App tokens are similar to appcoins which are used to power apps on mobile devices. Example of app tokens is AAVE coin used to power AAVE app cryptocurrency market.
Meme tokens are a type of cryptocurrency that is designed to represent a particular meme.They are typically created by users on social media platforms and are used to express ideas in a unique and creative way. SHIBA is a particularly popular example of a meme token issued by keeping in view the shiba in meme. Other examples of popular meme coins include Memetig Token, PepeCoin and Internet of Coins
Why altcoins are important?
Now we are left with the question that why these altcoins matter? Together they make up more than 45% of the cryptocurrency. Just like bitcoin, the volatility of altcoins is also very high. For reference just look at the SHIBA coin chart. But as more and more of these coins are generated, either for amusement or to address issues in the real world, another one can appear that fundamentally transforms a different area of our financial system.
The way we develop and use financial tools, applications, and services is being redefined by Ethereum. Thus, the options are essentially unlimited. Sadly, it is impossible to predict whether or when it may occur. Altcoins won’t disappear any time soon and that much is certain.