Altcoins currently make up about 50% or more of the total crypto market cap. Altcoins is a short form for "Alternative coin" and it can be used to describe a crypto or category of cryptocurrencies which is an alternative to the digital Bitcoin(BTC) Cryptocurrency.
There are currently about 10,000 altcoins right now, on coinmarketcap, as new coins are being created daily, the aim of altcoins was to improve certain aspects of Bitcoin, like it's drawbacks, flaws and issues that it currently faces such as: transaction speeds, energy efficiency and so on.
Let's take Litecoin(LTC) for examples, which is a BTC clone, The goal of it's creators was to speed up transactions and improve storage capabilities which they did, LTC is 4 times faster than BTC in terms of transactional processing.
These technologies can serve a variety of purposes depending on the goals of the developers or organization behind the particular Altcoin.
Altcoins vary in how they work, They may have similar features but all work differently , They are mostly peer-to-peer and most require a mining process in which users can solve difficult problems in cracking blocks, And also provide cheap and secure procedures of carrying out web transactions.
Stablecoins offer the benefits of cryptocurrencies without the price volatility. This coin follows the price of another asset and are mostly the same value as the asset they are tied to
A good example is the USD Tether (USDT) which is currently the largest stablecoin in terms of market cap. The value and price of Tether is linked and tied to that of the U.S Dollar, one(1) Tether will always be equal to $1 U.S Dollars.
Due to the fact that Stablecoins are created and intended to maintain the same value, they cannot be used as crypto investments, Instead, they are used to send money, purchase other Altcoins and as savings.
Staking can be a good way to have your crypto generate passive income for you, due to the fact that lots of altcoins have high interest when staked.
Staking involves committing your crypto assets to support a blockchain network and process transactions, And this method is available to cryptos that use the Proof of State(POS) model to process payment.
Crypto mining was the first procedure used to process crypto transactions, It started with Bitcoin. It involves using devices to solve mathematical equations to verify transactions and add more coins to the entire supply. Miners who do this successfully receive crypto rewards .
But, Mining as a whole requires a significant amount of energy and a huge computational power to succeed.
Crypto Tokens are special virtual currencies that represent tradable and fungible assets that reside on their blockchain. Tokens are used for investment or economic purposes, to make purchases, store value, fundraising and other benefits.
These types of Altcoins can be a digital or liquid asset and they simply represent ownership stakes in a tangible asset and stored on Blockchains. NFTs are a great example of this.
As discussed above, Altcoins, currently in their thousands will mostly fall into the four(4) categories discussed. If you are going to include Altcoins in your portfolio, you must do your research or consider the assistance of a professional to get as much guidance as possible, Do this to protect yourself from Losses, Scams or crypto projects that will turn out to be useless eventually.
Because of the high number of these cryptos available, it can be difficult to pick the right or the best one to invest in that will provide a great value, And return on investment(ROI) with time. These makes it risky to invest in just about any altcoin,
Altcoins are highly volatile and speculative investments to include in your portfolio, So, Before taking the risk and plunge into any Altcoins, Be watchful. and try to know what the company behind it is trying to achieve.
The ugly truth is, Most of the current Altcoin Projects will FAIL, get shaken out by competition and end up in the graveyard and forgotten. There are many examples of these already. But some will succeed too.
Here at SAMPEDIA, Our team of Financial professionals can offer you Tips/Strategies on how to identify the best Altcoins to trade or invest in, For more Information, Send us a message, We'll be glad to help.