What are Altcoins?
In simple terms, altcoins are alternatives to bitcoin. Bitcoin was the first major cryptocurrency to be introduced into the financial markets. However, since its introduction, a myriad of other cryptocurrencies has been introduced. In fact, as of May 2018, there are more than 1500 cryptocurrencies in circulation. All these other cryptocurrencies are regarded as altcoins.
Some examples of altcoins include ethereum, ripple, dash, zcash, monero, litecoins and others. There are several different reasons why these altcoins have been developed and each fulfills a specific purpose.
There are some altcoins that were developed to improve the security level offered by bitcoins. Other altcoins were developed to speed up the mining process or to speed up the rate at which exchanges can be made. Still other altcoins offer greater levels of anonymity than bitcoins. Based on preferences and investment goals, an investor can choose the type of cryptocurrency that he/she feels will benefit them the most.
Altcoins that Offer Speedier Processing than Bitcoins
One example of an altcoin that offers speedier processing time than bitcoins is Litecoin. Litecoin makes it possible for mining transactions to be approved in as little as 2 ½ minutes versus the 10 minutes that it takes to approve bitcoin transactions. If transaction speed is important to an investor, he may choose to invest in Litecoin rather than in bitcoins.
Another difference between Litecoin and bitcoins is that the number of possible Litecoin is 4 times the possible number of bitcoins. While there are only 21 million bitcoins available, it is possible to create as many as 84 million Litecoin. What this essentially means however, is that each Litecoin may be only worth a fraction of what a bitcoin is worth.
Ethereum is another example of an altcoin that offers speedier processing than bitcoins. Ethereum is really a cryptocurrency exchange platform that allows for very speedy transaction processing.
Ripple is another example of an altcoin that offers faster transaction processing speed. The remittance industry has been one of the first industries that has taken advantage of the processing speed of Ripple. Large remittance service providers such as Western Union and MoneyGram have both ventured into the use of Ripple to improve transaction processing speed of remittances.
Altcoins such as Ripple also offer cost-saving benefits. This altcoin allows financial institutions to save between 40% and 70%, which is a significant amount. Financial institutions and payment processors therefore may take greater interest in altcoins such as Ripple, over the more popular bitcoin.
Altcoins that Offer Greater Levels of Security and Anonymity
Monero is a good example of an altcoin that improves the privacy of transactions. With this altcoin, the entire identity of the trader is kept private. Not even address information is made public which makes this altcoin suitable for traders who do not wish to publicly disclose any aspect of their identity.
Even with the inherent security of cryptocurrencies, altcoins such as Monero, go beyond the basic level of security to improve privacy also.
While bitcoin is still by far, the most popular type of cryptocurrency, there are more than 1500 altcoins that offer different advantageous features. These features is some way improve upon the basic features offered by bitcoin and may includes features such as improved security and privacy, as well as faster transaction processing speed.