Bitcoin is the de facto leader in the cryptocurrency world. Not only is it the oldest, but it is also the most successful and most significant in market capitalization. Today, there are over 20,000 cryptocurrencies, most of which come after Bitcoin. And since Bitcoin is the oldest, people collectively refer to all the other cryptocurrencies that came after it as alternative coins or altcoins. Are you interested in becoming a Bitcoin trader? You can visit the bitcoin revolution, learn more about Bitcoin trading, and even start trading on the platform.
As a beginner in cryptocurrency, it may not be apparent to determine which among the thousands of altcoins to pick. Each comes with its unique features and uses. However, they all tend to use Bitcoin as a benchmark. So, most altcoins are there to try and rectify and improve some aspects of Bitcoin.
Why Go For Non-Original?
Even before getting into the nitty-gritty, the fact that altcoins are alternative coins to Bitcoin and that they all use Bitcoin as a benchmark should be of great concern to any keen investor. Why would you go for something that is not original? Most shoppers will look for the original even when shopping for shoes or clothes.
The problem with something that is not original is that it tends to mimic the original. Most altcoins mimic Bitcoin. Generally, most altcoins tend to present themselves as digital currencies or assets like Bitcoin. You don’t have to be an expert to understand this. Just go to the internet and search for the top cryptocurrencies. Chances are that you will get many lists that start with Bitcoin and then the altcoins based on price.
Variety and Confusion in Altcoins
Another fundamental issue with altcoins is the degree of variability among them. Essentially no altcoin is like the other. Each comes with its unique features and functionalities. And this may not be very clear for an investor, especially if you are coming across altcoins for the first time. With over 20,000 altcoins, where do you start, and where do you end?
An example will be more helpful in understanding this point. Ethereum is one of the most popular altcoins. Ethereum has its cryptocurrency version of Bitcoin called Ether. However, Ethereum also functions as a platform to support app development. Ethereum differs from Litecoin, which tries to imitate Bitcoin as an alternative to silver.
Altcoins’ Dependency on Bitcoin
Another essential point to consider when comparing Bitcoin with altcoins is their relationship. The cryptocurrency market tends to adopt similar price volatility and shift trends. For example, all cryptocurrencies fall into the same category when there are booms or bursts. But altcoins depend more on Bitcoin than Bitcoin depends on them.
When Bitcoin prices plummet, the prices of most altcoins will also plummet. And since the prices of most altcoins are much lower than that of Bitcoin, if the price drop is significant, some altcoins may be crashed out, leaving Bitcoin still on. This reality should concern a crypto investor.
In terms of price volatility, altcoins also tend to have higher volatility than Bitcoin. If the price of Bitcoin shifts a bit, altcoins will shift by larger margins. And this has become evident where Bitcoin has withstood market crashes while some altcoins have not.
Acceptability
Finally, it is important to consider acceptability when comparing Bitcoin with altcoins. Bitcoin is widely accepted and used. And this is not the case with many altcoins, especially the smaller and less known ones. So, you can easily buy, sell, and transact using Bitcoin, but you may find it challenging to do the same with altcoins like Litecoin.
Final Thought
With over 20,000 cryptocurrencies available today, it is essential to understand the difference between Bitcoin and altcoins. While some altcoins are significant, overall, Bitcoin remains the better alternative.