In a our article about investing for cryptocurrency beginners, we mentioned the idea of diversifying your holdings. It can feel, particularly to beginners, as if the entire cryptocurrency market is defined by the headline-grabbing and very valuable bitcoin. Indeed, bitcoin is essentially the flagship cryptocurrency and the one that got us all thinking about crypto as an avenue for investment in the first place. But it is far from the only option. And as we look at the expanding cryptocurrency landscape in 2018 and consider its future, it’s becoming more and more important to get to know the alternative options known as altcoins. Below, we’ll briefly get into some of the most important ones.
Litecoin is effectively the Robin to bitcoin’s Batman – or, as one analysis put it more aptly, the silver to bitcoin’s gold. It’s been around almost since the beginning and was the first altcoin to emerge in a major way as a lower value substitute for bitcoin. The two work almost identically, with the main difference being market cap and active price, though litecoin can also appeal to some by virtue of its relatively fast transaction speed. It tends to be among the most valuable altcoins at any given time, though its value has been fairly convincingly surpassed by a few others.
To understand ether properly, you have to understand ethereum – which, defined by one article analyzing a handful of altcoins, is a platform that enables developers to build and deploy applications on a blockchain. Ether is the actually cryptocurrency associated with this platform, such that those using it need to acquire ether to pay for their work, more or less. And because ethereum has a seemingly unlimited capacity to be used by developers, ether is in fairly consistent demand, which means it can generally be traded as one of the most valuable crypto coins.
It would be impossible to concretely identify the trendiest altcoin at any given moment, but ripple certainly seems to be having its moment in 2018. It was designed to work via a consensus ledger rather than a blockchain (meaning a network of servers validates transactions), and more importantly is used as a means of transferring wealth in a manner that’s virtually instantaneous. The cryptocurrency investment fueling ripple is XRP, which basically serves as a universal currency that can facilitate transactions across country lines or between different types of assets, etc.
More than some of the other altcoins here, which are alternatives that are derivative of bitcoin, dash appears to have been launched as something of a challenge to bitcoin. Using its own algorithms and hybrid verification process, it basically allows for two features bitcoin can’t currently match: instant transactions, and fully private transactions. It’s becoming better known, and is also gaining avenues for usage that could ultimately make it competitive with bitcoin – though for now its price remains minuscule by comparison.
Bitcoin cash is an altcoin unto itself, even if it’s directly related to bitcoin itself. Established as a fork from bitcoin (which basically means it stemmed off of the existing bitcoin network), it appears to be intended to accomplish some of the same things competitors have strived to do. Namely, it’s meant to make transactions faster and easier, such that it becomes the “cash” component to ordinary bitcoin’s commodity status.