Due to the rapid rise of Bitcoin in the market, investors created an alternative virtual currency, with different formats, to diversify investment portfolios. That cryptocurrency is altcoin.
Currently, it is estimated that there are more than eight thousand altcoins on the market. This is mainly due to the alternative feature, which encompasses all virtual currency, except Bitcoin, the inspiration for this creation.
To understand what altcoins are and why they are an interesting option for your virtual wallet, continue reading the content below, in which we will illustrate and define the concepts. Check out.
What are Altcoins?
Generally speaking, it is possible to define altcoin as an alternative currency to Bitcoin, the first and most famous cryptocurrency. This means that if the crypto is not Bitcoin, it is an altcoin.
This concept came about with the first cryptocurrency created with this classification, Namecoin, with the main objective of replacing Bitcoin. From this starting point, several other virtual currencies were created, seeking to innovate options in the financial market.
That’s because the goal of altcoins is to explore opportunities in the crypto universe, launching new goals that differ from the first cryptocurrency.
After the first altcoin was launched, entrepreneurs around the world started to create their own cryptocurrencies, creating a market with several options to start trading.
Altcoin X Bitcoin – Understand the Difference Between These Cryptocurrencies
Bitcoins and altcoins are two concepts linked together. After all, the first cryptocurrency was the inspiration for the creation of several other virtual currencies that exist today.
While Bitcoin is a virtual currency that allows for financial transactions between pairs of people, without the intermediation of a regulatory body, altcoins have different rules on monetary policies.
This ranges from policies to limit expenses and interest incurred between transactions to where and how virtual currencies will be stored, which helps to encourage the purchase and sale of cryptocurrencies.