Since the creation of Bitcoin in 2009, the cryptocurrency market has experienced rapid growth. Bitcoin, as the first and most well-known virtual currency, continues to lead the way, but many other cryptocurrencies, called altcoins, are emerging alongside it. Each of them has its own unique characteristics and individual growth potential. Learn the differences between bitcoin and altcoins. Learn about some examples of altcoins that are worth paying attention to.
From the text you will learn:
- what altcoins are,
- what altcoins to invest in,
- how to start investing in altcoins.
Are you investing in virtual currencies? Don’t focus solely on Bitcoin. Consider diversifying your portfolio with several different projects. This will reduce the risk of losing your capital if one of them performs poorly.
Bitcoin and altcoins – what is it?
Bitcoin is considered the pioneer of cryptocurrencies. Its main goal was to create a decentralized form of digital currency, independent of banks and governments. It uses blockchain technology to secure transactions and maintain the integrity of the financial system.
To people who don’t know much about the virtual currency market, it may seem that Bitcoin is synonymous with cryptocurrency. However, this is not true. In addition to it, there are altcoins, or “alternative coins.” They compete with Bitcoin, offering a variety of functions, use cases and technologies. Their number reaches several thousand and is constantly growing!
Altcoins – a list of interesting examples
Altcoins are created to solve limitations that have emerged in Bitcoin’s design or to bring new innovations to the cryptocurrency space. Here is a brief characterization of several popular platforms and their associated virtual currencies.
- Ethereum (ETH) – is a blockchain-based platform that enables the creation and execution of smart contracts and decentralized applications. It has its own cryptocurrency called Ether (ETH), which is used to pay for transactions and as the basis for activity on the platform.
- Binance Coin (BNB) – is a cryptocurrency created by the Binance exchange. It was initially used as a token to pay commissions on the exchange, but later its use was expanded to include payments, investments and other services in the Binance ecosystem.
- Cardano (ADA) – is a blockchain-based project that focuses on scalability, security and sustainability. Its developers are trying to combine the advantages of different approaches to blockchain technology to create a more advanced and sustainable platform. ADA is a Cardano cryptocurrency, and the project aims to provide an infrastructure for the creation of applications and smart contracts.
- Solana (SOL) – is a state-of-the-art blockchain platform that strives for high performance and low transaction fees. It is focused on supporting DeFi (decentralized finance) applications and other projects that require fast transactions and scalability. Solana’s cryptocurrency is SOL, which plays the role of both transaction fees and units of value.
- Polkadot (DOT), a platform that aims to enable communication and cooperation between different blockchains. DOT is Polkadot’s cryptocurrency, used for network management, voting and as a unit of value.
Investing in altcoins – how to get started?
To choose which altcoins to invest in, there are several key factors to consider:
- market capitalization, or the total value of all available coins of a given cryptocurrency – this is an indicator of the stability and growth potential of a given currency; altcoins with different market capitalizations may have different risks and potential returns,
- the history and stability of a given cryptocurrency – altcoins with a long track record tend to be more stable, but also less prone to extreme spikes; newer projects may be riskier, but may also offer greater growth potential,
- technological foundation – if a project has innovative technological solutions or offers unique opportunities, investing in it may translate into long-term success,
- risk factor and growth potential – riskier projects may offer a higher return, but may also end in a loss.
Remember that trading cryptocurrencies is risky and can lead to loss of capital. Therefore, if you are considering investing in Bitcoin and altcoins, pay attention to the offer of OANDA TMS Brokers – a broker that not only allows you to trade virtual currencies, but also offers its clients access to reliable sources of information. Using a handy mobile application, you can view market analysis, expert opinions and forecasts for a particular cryptocurrency. This can help you understand investment prospects. You also have at your disposal continuously updated charts, so that you will always have information about Bitcoin and altcoin exchange rates at your fingertips.
Bitcoin is a pioneer that continues to be the foundation of the entire cryptocurrency ecosystem, and many people want to invest in it. But it is altcoins that offer a diversity of innovations and potential use cases. Whatever you choose, remember that investing in cryptocurrencies comes with risks. That’s why it’s a good idea to thoroughly research the market before any investment, using professional tools such as TMS Brokers’ OANDA mobile app.
The above article is not investment advice. All information and data and studies contained on okbr.pl are for informational or statistical purposes. Therefore, they cannot be treated as an encouragement to make a selected investment decision. Nor can they be treated as investment advice or a binding assessment of the investment market or any other financial instrument. Any investment decisions made by a user of the okbr.pl portal are made at the user’s own risk and responsibility. The information contained on the website does not constitute a recommendation and investment advice within the meaning of (art.42 section 1 and art.76) of the Act of July 29, 2005 on investment advice (Journal of Laws 2005 No. 183 item 1538 as amended).
