Altcoin

All cryptocurrencies other than Bitcoin in the market are known as Altcoin. An altcoin is a cryptocurrency that was launched in the market after the huge success of Bitcoin. An altcoin is a better replacement for Bitcoin. Bitcoin is the world's first peer-to-peer digital currency. All the new digital coins that have come to market since Bitcoin have tried to overcome Bitcoin's shortcomings.

The Altcoin is a combination of two words which are "Alt" and "Coin." It means an alternative coin. Bitcoin and Altcoin have some similarities but also many differences. Similarities between Bitcoin and Altcoin are that their basic structure is similar, but the difference between them is that Altcoin offers newer and additional features compared to Bitcoin. Some of the major Altcoins are Ethereum, Litecoin, EOS Token, Ripple, Monero, TRON, etc.

All Altcoins have different characteristics that distinguish them from Bitcoin. Altcoin can be broadly divided into four types, they are,

1. Stablecoins
2. Mining-based coins
3. Security tokens
4. Utility tokens

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Stablecoins:

Stablecoins are digital currencies like other cryptocurrencies, but their values don't fluctuate as much as other cryptocurrencies. That is why stability is enhanced by stablecoins. Stablecoins use computer algorithms to keep their value relatively constant. It is generally used for storing and transferring money.

Mining-based coin:

Mining is done to create such coins. In this case, the system can generate new coins by solving the equation to verify and create blocks. Many such coins arrived in 2020. They are Litecoin, Zcash, etc.

Security token:

Security tokens are also called equity tokens. Its function is very similar to equity shares, but the difference between them is that equity shares are issued on a centralized stock exchange and can be bought and sold through it, but equity tokens do not require such a centralized stock exchange and can be sold on the blockchain platform. It is reasonable with any traditional stock. It provides equity in the form of ownership of the coins or by giving a payout to the shareholders, for example, tZERO, Polymath, etc.

Utility Token:

Many products, services, and apps can be made using blockchain technology or blockchain platform. Any decentralized apps are based on the blockchain platform. And this blockchain platform has its own cryptocurrency utility token. Utility tokens provide services within a network. It gives users access to future products or services. Basic Attention Token and Funfair are some examples of utility tokens.

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