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Published on Oct 28, 2021

Altcoin

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#Glossary
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Altcoins are cryptocurrencies that came into existence as a result of the success of Bitcoin. They typically position themselves as superior alternatives to Bitcoin. Bitcoin's rise to prominence as the first peer-to-peer digital currency paved the door for many others to follow. Most altcoins are seeking to resolve Bitcoin's perceived issues by establishing competitive advantages in future iterations.

"Altcoin" is a combination of the terms "alternative" and "coin," and it refers to all Bitcoin alternatives. The fundamental structure of Bitcoin and altcoins is identical. As a result, they exchange code and operate as peer-to-peer systems or as massive computers capable of processing enormous quantities of data and transactions concurrently. In certain cases, cryptocurrencies strive to be the next Bitcoin by being a low-cost form of digital commerce. There are many distinctions between Bitcoin and altcoins. Bitcoin was one of the first cryptocurrency iterations, and its philosophy and design set the standard for the creation of future currencies.

However, its execution has numerous flaws. Proof-of-Work (PoW), for example, is an energy-intensive and time-consuming consensus process used to produce blocks. The possibilities of Bitcoin's smart contracts are likewise restricted. Altcoins capitalize on Bitcoin's inadequacies to gain a competitive advantage. To reduce energy consumption and the time necessary to produce blocks and validate new transactions, some cryptocurrencies employ the Proof-of-Stake (PoS) consensus process.

Altcoins have established a market for themselves by differentiating themselves from Bitcoin in this way. As a result, they have attracted investors who perceive them as viable alternatives to Bitcoin. Investors hope to benefit as cryptocurrencies gain momentum, and users, as their prices rise.


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