Clark Galvan
Investing in cryptocurrencies is a risky business, but it can be lucrative for those willing to take a chance. Bitcoin is the most well-known cryptocurrency, but there are thousands of alternatives, known as altcoins, and choosing the right one to invest in can lead to big payouts.
Altcoins are any cryptocurrencies that are not Bitcoin (and sometimes not Ethereum). They are often presented as better alternatives to Bitcoin, and some have newer features, such as being able to handle more transactions per second or using different consensus algorithms.
Some of the most popular altcoins include Ethereum, Binance Coin, Solana, Cardano, Dogecoin, and Shiba Inu.
However, it is important to do your research before investing in altcoins, as it is a risky and unregulated space.
| Characteristics | Values |
|---|---|
| Largest and oldest Bitcoin alternative | Ethereum (ETH) |
| First to introduce smart contracts | Ethereum (ETH) |
| Native token | Ether |
| Cheaper alternative to SWIFT | XRP |
| 9th most valuable cryptocurrency | Solana |
| Supports dApps and NFTs | Solana |
| Meme coin | Dogecoin |
| Supports dApps, NFTs, and smart contracts | Avalanche |
What You'll Learn
Ethereum
The Ethereum Merge, which occurred in mid-September 2022, was the network's shift from a proof-of-work system to a proof-of-stake system. This change was expected to make the technology more energy-efficient, and the Ethereum Foundation predicted that it would cut energy usage by 99.95%.
The Ethereum blockchain has a unique utility for dApp developers, who use the network to develop other cryptocurrencies, trade non-fungible tokens, and create and run smart contracts and other decentralised finance applications.
If you want to invest in Ethereum, you can buy it directly through a crypto exchange, stock broker, or payment app. Alternatively, you can gain exposure to Ethereum by investing in stocks like Grayscale, Bitwise, and Coinbase, which have large exposure to Ethereum technology.
It is important to note that investing in cryptocurrencies is extremely speculative and can be very risky.
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Solana
However, the Solana network has faced criticism for being too centralized and has been plagued by outages that have undermined confidence in its network, including a nearly 20-hour outage in February 2023.
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XRP
The XRP Ledger is designed to facilitate faster and cheaper payments, with transactions settled in 3-5 seconds at a cost of $0.0002 each. It also features the first decentralised exchange (DEX) and custom tokenisation capabilities built into the protocol.
In late 2020, Ripple Labs became locked in a legal battle with the United States Securities and Exchange Commission, which filed a lawsuit against the company and two of its executives on the grounds that they traded $1.3 billion in their XRP token as security without registering it with the commission. The outcome of the lawsuit will have far-reaching implications in the crypto space.
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Binance Coin
Changpeng Zhao is the founder and CEO of Binance. He spent four years at Bloomberg as head of tradebook futures development and later joined Fusion Systems as a partner. He Yi, a co-founder and CMO at Binance, previously worked as a TV anchor and presenter. She also co-founded OKCoin, which was the largest fiat-to-crypto exchange in China at the time.
Binance is the biggest cryptocurrency exchange globally based on daily trading volume. The Binance network includes the Binance Chain, Binance Smart Chain, Binance Academy, Trust Wallet, and Research projects, all employing blockchain technology. BNB is an integral part of the successful functioning of many Binance sub-projects.
BNB is one of the world's most popular utility tokens. It can be traded like any other cryptocurrency, but it can also be used in a wide range of applications and cases. For example, BNB can be used to pay for goods and services, settle transaction fees on the Binance Smart Chain, and participate in exclusive token sales.
BNB uses an Auto-Burn system to reduce its total supply to 100,000,000 BNB. The BNB Auto-Burn mechanism adjusts the number of tokens to be burned based on BNB's price and the number of blocks generated on the Binance Smart Chain during the quarter. This offers greater transparency and predictability to the BNB community.
Binance has also introduced its own blockchain, and the tokens are now issued from there. The Binance blockchain is secured by the Tendermint byzantine-fault-tolerant (BFT) consensus mechanism.
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Cardano
Like the prices of most crypto assets in 2018, ADA's price fell sharply that year. By November 2018, it had fallen back to $0.02. It took more than two years for ADA to return to above $1.31. In early September 2021, ADA reached a new all-time high of $3.10. As of August 16, 2024, the price of ADA is $0.34265023, with a 24-hour trading volume of $322.46 million.
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Frequently asked questions
Altcoins are any cryptocurrencies that are not Bitcoin. Some people also exclude Ethereum from this definition. Altcoins are often presented as better alternatives to Bitcoin, but they are usually riskier investments.
Examples of altcoins include Ethereum, Ripple, Solana, Dogecoin, and Cardano.
Altcoins have a much higher upside in terms of percentage gain. They can also be cheaper than Bitcoin, which makes them a good option for diversifying your cryptocurrency holdings.
Altcoins are incredibly risky investments. They are very volatile and it is difficult to determine their use cases. They are also less liquid than Bitcoin and have a smaller market cap.
