When we talk about the cryptocurrency market, one of the first words that comes to mind is Bitcoin. However, Bitcoin is far from the only cryptocurrency option that you can and should have in your wallet. The term “altcoins” is used to refer to all cryptocurrencies that are alternatives to Bitcoin, “altcoin” means “alternative currency to Bitcoin”.
One aspect that I find fascinating in the universe of cryptocurrencies is the ability to create coins that meet the specific needs of each business, without government intervention and with the advantage of decentralization – which also has its disadvantages, but is the subject of another article.
Although Bitcoin’s source code has been released as open source since its inception, the first fork of this code took just over 2 years to create. This fork was named Namecoin. From there, it took another 2 years for the alternative cryptocurrency market to grow and become popular with users.
There are three ways to create an alternative cryptocurrency: via fork, via proprietary blockchain and via third-party blockchain.
Creation through a Fork, plays a key role in the creation of new digital currencies. This is because new cryptocurrencies can be created from the open source of existing digital currencies – which shortens the path and allows the developer to keep their attention on new features or changes to the base code, for example.
The creation through a Blockchain of its own involves much more work, since it is necessary to develop a decentralized network from scratch. This involves costs with infrastructure, staff, time invested in conceptualization and much more. However, it also gives the creator full control over the project, which includes security choices, flexibility according to the needs of the target audience and the possibility of innovation in the market.
Finally, our third option is the creation through a third Blockchain. For example, it is possible to use the Ethereum platform to create ERC-20 tokens. Among the advantages of this option is cost reduction and the guarantee of compatibility of your cryptocurrency with other platforms.
Meet 3 precursor altcoins in the cryptocurrency market
Dogecoin
Dogecoin was launched in December 2013 with an unusual purpose: not to be taken seriously. However, the cryptocurrency turned out to be well received by users, who saw it as an opportunity to mine without the intense competition present in other cryptocurrencies.
Although it started as a joke, Dogecoin quickly became popular and achieved significant value in the cryptocurrency market. An interesting aspect of Dogecoin is that its community often uses the currency for charity and fundraising activities.
Dogecoin is one of the most well-known cryptocurrencies and has a dedicated and engaged fan base. Although its initial purpose was somewhat eccentric, Dogecoin has proven to be a serious and viable cryptocurrency with real potential for use in transactions and charitable activities.
Namecoin
In April 2011, the first fork of Bitcoin, known as Namecoin or NMC, was launched. The creation of Namecoin originated from a project called BitDNS, which used Bitcoin’s network technology to provide DNS services.
The main goal of BitDNS was to create a decentralized domain name registration system without the need for a centralized registrar such as ICANN. With Namecoin, users can register domain names and other resources, making the system more resistant to censorship and manipulation.
While Namecoin has not caught on as popularly as other cryptocurrencies, it is still valued by a community of users who appreciate its decentralized approach to domain name registration and other functionality.
Litecoin
Litecoin was officially launched in October 2011 and, compared to Bitcoin, it has few variations. The main difference between Litecoin and Bitcoin is the block processing fee. While Bitcoin takes about 10 minutes to process a block, Litecoin is able to do the same job in just 2 minutes and 30 seconds.
This difference in processing rate makes Litecoin faster and more efficient compared to Bitcoin. Additionally, Litecoin uses a different mining algorithm than Bitcoin, known as Scrypt. This algorithm is less processing and memory intensive, making mining more accessible for everyday users.
Despite these differences, Litecoin is a cryptocurrency that is highly compatible with Bitcoin, being used on several platforms and services that also accept Bitcoin. Litecoin is considered a viable alternative to Bitcoin and has an active and engaged user and developer base.
Read more about cryptocurrencies:
- Discover the 3 most common cryptocurrency scams and learn how to avoid them
- Brazilian Cryptocurrencies: Get to know the main options available
- What are Bitcoin wallets and how to create them?
What are the most popular altcoins on the market?
According to data from CoinMarketCap, 11 new digital currencies are created every 24 hours. Namecoin, Litecoin and Dogecoin are just 3 existing cryptocurrencies in a market that today has thousands of alternative currencies.
Bitcoin Cash (BCH)
BCH is a successful Bitcoin fork created in 2017 to address transaction processing and fee issues. The alternative currency uses the same code and algorithm as Bitcoin and offers greater capacity to handle transactions, lower fees and faster confirmations.
Cardano (ADA)
Cardano (ADA) is a blockchain platform launched also in 2017, designed to be more secure and scalable than other existing blockchains. ADA cryptocurrency is used to pay transaction fees on the network and is traded on several cryptocurrency exchanges.
Ethereum (ETH)
The third item on the list is Ether, considered the main altcoin on the market, ETH belongs to the Ethereum blockchain, which revolutionized the crypto sector with smart contracts and dApps.
Ripple (XRP)
XRP is the official token of Ripple, a distributed payments system founded in 2012. Although centralized and facing regulatory pressure, XRP remains one of the top 10 altcoins on the market.
Solana (SUN)
Solana is one of the main rivals of Ethereum. Its network is known for being fast, cheap and optimized for gaming.
It is essential to point out that each altcoin has its own characteristics and it is crucial to analyze and understand your goals before investing. Some coins are designed to facilitate basic day-to-day transactions, while others are geared towards specific markets, such as the coffee market. Regardless of the altcoin you decide to invest in, do a good research on the market and be careful not to fall for scams.
Translation by Laura Bonci
