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Really? Altcoin Challenged Bitcoin

Dec 02, 2017 Posted /  12869 Views

Really? Altcoin Challenged Bitcoin

Most people nowadays are at least somewhat familiar with Bitcoin. However, once they begin to get involved with cryptocurrency, they are surprisingly exposed to the digital currency world where there are actually hundreds of types of cryptocurrencies known as Altcoins. Altcoins are the alternative cryptocurrencies launched after the success of Bitcoin. Generally, they project themselves as better substitutes to Bitcoin. Altcoins are an intriguing facet of the cryptocurrency landscape; however, they are not used by everyone. After much evaluation people decide whether or not to invest in Altcoins as part of their cryptocurrency portfolio.

Challenge for Bitcoin's domination of Crypto market by Altcoins

The success of Bitcoin as the first peer-to-peer digital currency paved the way for many to follow. Many Altcoins are trying to target any perceived limitations that Bitcoin has and come up with newer versions with competitive advantages. There is a great variety of altcoins. Altcoin is a London-based start-up working on sparking behavioral change for good (in connection with the United Nations Sustainable Development Goals). The company is primarily looking into the motivation for altruistic actions. It is also investigating an alternative currency which would value more than pragmatic materialism in our daily actions. While validating the idea and building a minimum viable product, this company believes that simple website and basic branding work were necessary.

"Altcoin" is an amalgamation of two words: "alt" and "coin". Alt is a short form of alternative and coin signifies currency. This merger of words implies a category of cryptocurrency that can be considered an alternative to the digital currency Bitcoin. After the success story of Bitcoin, many other peer-to-peer digital currencies have emerged in an attempt to imitate their success. Many of the altcoins are built up on the basic framework provided by Bitcoins. Thus most altcoins are peer-to-peer and they involve a mining process offering an efficient and cheap ways to carry out transactions on the web. But even with many overlapping features, Altcoins vary widely from each other.

Bitcoin and types of Altcoins – How they work and their impacts

Few of the Altcoins have gained popularity; the rest are lesser-known. Examples of Altcoin include Litecoin, Dogecoin, Peercoin, Feathercoin, Zetacoin, Novacoin, etc. Litecoin is seen as the closest competitor to Bitcoin. Even with many close competitors, Bitcoin is still leading the virtual currency pack. Newer and more innovative versions are getting launched that offer modification in areas like transaction speed, privacy, proof-of-stake, DNS resolution and more

Despite 2017 being a stellar year for cryptocurrencies as a whole, Bitcoin is still the leader when we talk about popularity and market share. However, we cannot ignore several characteristics inherent to Litecoin which has the ability to challenge Bitcoin’s domination in the crypto market.

Bitcoin is certainly leading the cryptocurrency market in terms of adaption and market share. However, some are of the opinion that newer cryptos are actually a better investment. One of the proposed alternatives is Litecoin.

This is also referred to as the “silver Bitcoin,” at times and it could prove superior depending on four factors. First, Litecoin’s algorithm is far simpler than Bitcoin’s and that is exactly what makes it easier to run on graphics processing units (GPUs).  Consequently, there is a lower barrier to entry for Litecoin miners when compared to Bitcoin. Next considering factor is that Litecoin has a faster block generation speed. Processing a Litecoin block takes two-and-a-half minutes whereas Bitcoin’s 10 and it’s completely opposite. This leads to the decrease in transaction fees, making the Litecoin cryptocurrency more attractive to investors.

However, some altcoins constantly innovate their features to excel the popularity of Bitcoins and bring up something Bitcoins do not offer. For example, Darkcoin serves to provide a platform for completely anonymous transactions. Another altcoin Bitsh describes itself as “a fair version of Wall Street,” and Ripple serves as protocol users can employ to make inter-currency payments with ease. Some altcoin ecosystems, such as CounterParty and Mastercoin, even utilize the Bitcoin blockchain to secure their platform.

Investors point of View – Bitcoin or Altcoins

Many investors of Bitcoin are of the profound opinion that altcoins are completely unnecessary and will not succeed. The reason they assume is because they cannot rival the infrastructure Bitcoin offers. However, altcoins play a pivotal role. Altcoin is designed with great flexibility and adaptability in mind to cater for growth and development which is hard to predict in the preliminary stage of any product. While decentralization is one of Bitcoin’s most prominent goals, altcoins further decentralize the cryptocurrency community. Apparently, altcoin can allow developers to experiment with unique features. While it is true that Bitcoin can copy these features if the developers or community desires, fully-functioning altcoins are much better “cryptocurrency laboratories” than Bitcoin testnet.

We can easily derive that Altcoin can be a challenging market player for Bitcoin and can give healthy competition to it.  Altcoin is a resource that gives cryptocurrency users alternative options and forces Bitcoin’s developers to remain active and continue innovating. Users can continue evaluating Bitcoin and if they are not satisfied with their digital desires, they can adopt an altcoin. However, if enough users left Bitcoin for a particular altcoin, then Bitcoin developers would have to adopt the new features as desired by the community or they will risk losing its place as the preeminent cryptocurrency.

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Tags: bitcoin cryptocurrency altcoins Decentralization Bitcoin Blockchain Altcoin Challenged

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