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Bitcoin vs Altcoins: What do altcoins bring to the table?

Bitcoin vs Altcoins: What do altcoins bring to the table?

Bitcoin is the alpha. The beginning. The controller of the entire cryptocurrency market. Without bitcoin there are no altcoins. Bitcoin opened up doors that a lot of us in the community didn’t even know were shut. Bitcoin stirred up the curiosity, the momentum for what may become a financial evolution. Bitcoin was the eye-opener that gave birth to altcoins.

So what exactly are altcoins?

An altcoin or ‘alternative’ coin is basically any cryptocurrency that is not bitcoin. Though altcoins are not bitcoin, they possess similarities to bitcoin like the peer-to-peer system bitcoin is built on. Altcoins are new and improved versions of crypto. Bitcoin was created with limitations, some of which are the energy consumption involved in securing the blocks in its blockchain, projects cannot be built on bitcoin’s network etc. The founders of Ethereum (ETH), an altcoin, saw this problem and developed its network to allow altcoins build on the ethereum network. This has allowed so many projects to be in existence. However, Ethereum network also has its issues such as high gas fee. Gas fees are transaction fees used to validate transactions in a crypto network. All these problems gave birth to altcoin projects like Tron, Polygon, Solana, Avalanche etc. The list goes on and on, there are over 5000 altcoins presently in the market.

What’s the relationship between them?

The cryptocurrency total market cap is above $2 trillion. Out of that, bitcoin has the largest market share compared to any other altcoin, this is the reason why any significant movement in price of bitcoin affects the entire market. When bitcoin price significantly rises or falls, it’s just a matter of time before alts follow suit. Many participants in cryptocurrency community have reference for bitcoin, like a reserve currency. Just as dollar is the reserve fiat currency, bitcoin is the crypto reserve currency. Altcoins are paired to BTC on every centralized exchange.

What do altcoins bring to the table?

Altcoin projects are formed as a result of what is not present in the community. Like the example about ETH above, there are many more altcoin projects that have been built to improve what already exists in the market. Also, Bitcoin’s value has significantly risen so high, some people may never be able to afford 1 BTC. Altcoins give the community a chance at getting into a good project while it’s undervalued. Which means we’d have a better opportunity to generate more wealth in shorter time with altcoins than bitcoin. Altcoins also bring in more options. As a crypto community participant, you may prefer some ecosystems over others. For example, some people prefer to use Binance Smart Chain (BSC) ecosystem over Solana ecosystem, some others would prefer to use Solana, others Polygon, some would rather be active in all or none. These are three strong selling points of altcoin market.

In conclusion

Bitcoin brings much to the table, altcoins are bringing so much more. Whether its bitcoin or altcoins or both, sufficient understanding of the problem solved by the project’s existence will be required to take part in a project and be patient enough to hoDL.