Altcoins

What Are Altcoins?

Altcoin = alternative coins. Any cryptocurrency other than Bitcoin is called an altcoin.

The Bitcoin protocol is open source which means that anybody can create their own coins(decentralized, diversified).

There are 1000s of different altcoins but many of them are scams. Some of them are very innovative though – it is important to only select/use good ones.

Some altcoins:

Namecoin is the first fork of Bitcoin, so it is the first altcoin.

Litecoin is the first altcoin created with a different mining algorithm than Bitcoin

Peercoin is the first hybrid of POW and POS

POW = Proof of work: you put your computers to work

POS = Proof of stake: you just have to own coins

Ethereum: first turing complete blockchain. You can program smart contracts as well as decentralized applications directly into the blockchain.

Privacy centered coins: Monero, DASH, ZCASH

Altcoins

 

Benefits of Altcoins:

Experimentation, Innovation, testing and access to more features

Freedom of choice

Decentralization through diversification

Trading: more markets to trade, unique trading strategies,

Raise capital

 

Altcoin Scams:

Make sure to do your due diligence before trading or investing into an altcoin.

# Undisclosed pre-mining: This means the developer mines coins ahead of the public without letting the public know.

# Pump and dumps: They develop a coin just to pump it up on the market and then dump on everybody

# Malware which tries to steal your private keys from your other wallets

# Network attacks(smaller networks are at risk)

# Fake fundraisers: developers create a token and run off with peoples money

# Most cloud hashing. Cloud hashing = you rent mining power from internet companies, many of them are ponzi scemes.