DEFINITION of ‘Altcoin’
Altcoins are the alternative cryptocurrencies launched after the success of Bitcoin. Generally, they project themselves as better substitutes to Bitcoin. 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 combination of two words: “alt” and “coin”; alt is short for alternative and coin signifies currency. Thus together they imply a category of cryptocurrency that is 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 that success.
Many of the altcoins are built up on the basic framework provided by Bitcoins. Thus most altcoins are peer-to-peer, involve a mining process and offer efficient and cheap ways to carry out transactions on the web. But even with many overlapping features, altcoins vary widely from each other.
Even with many close competitors, Bitcoin is still leading the virtual currency pack. Newer and more innovative versions are getting launched that offer modifications in areas like transaction speed, privacy, proof-of-stake, DNS resolution and more. A few of them 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.
What Was the First Altcoin?
Created in April 2011, Namecoin was the first altcoin. Although it also functions as a currency, Namecoin’s primary purpose is to decentralize domain-name registration, which makes internet censorship much more difficult. As its place among the top ten cryptocurrency market caps suggests, Namecoin has remained one of the most successful altcoins throughout its short lifespan.
Where Can I Obtain Altcoins?
As with Bitcoin, there are a variety of ways to obtain altcoins. The most basic way to obtain altcoins is to accept them as payment for goods or services. If you are interested in doing this, place an ad showcasing your skill-set on a cryptocurrency job board.
You can also trade for altcoins on cryptocurrency exchanges. Most exchange use Bitcoin as an intermediary (although a few include fiat pairs), so if you do not already own bitcoins you will need to buy some before you can trade for altcoins. Some of the most-trafficked exchanges include Vip Bitcoin, Bittrex, Poloniex, etc.
Many altcoin communities also sponsor giveaways to increase exposure of their coin and entice new users to join their communities. This is a great way to acquire coins if you are low on funds or do not have marketable skills.