Altcoins vs. FIAT money

The alternative cryptocurrencies to Bitcoins are termed as “Altcoins” in the world of cryptocurrencies, all of which are token based. So, let us see why Altcoins were developed, how they differ from good old FIAT money. 

The Concept Behind Altcoins

When a new service succeeds, then doors for potential entrants in the market are opened respectfully, and this was the opportunity that was availed by Altcoin developers who believed that the market could use a new cryptocurrency with a better interface, exchange rate, and more developed programming. This is when currencies like Ethereum, Litecoin, etc., started emerging and went on to create a global network of decentralized currencies.

Altcoins FIAT

 

Added Innovation

If every incoming currency followed the same concept that Bitcoins did, then there would be absolutely no point entering the market considering how far Bitcoins had gone and that nobody will be willing to invest in something with such indefinite prospects of return. This is essentially why the newer currencies claim to be based on technologies which are, on paper, superior to Bitcoins and can actually change the financial network of organizational structures all over the world.

Some currencies like Ethereum have multiple ends to them, including the currency (Ether), the ledger where the transactions take place and are stored (Ethereum Blockchain), the codes executed upon fulfillment of a condition (Smart contracts), etc. These concepts allow for the expansion of the virtual currency market far beyond what it initially stood for, and these new and secure networks could be the reorganizing businesses need in the near future.

Benefits of Investing in Altcoins

As of today, Bitcoin is swooping at an all-time high of around $5680 and no one can see a potential end to this complete dominance in the market as far as this magnificent rate is concerned. If the Bitcoin is that high, then why would anyone be interested in any other currency?

The answer is uncertainty and affordability. Since the entire application of Bitcoins is decentralized and there is no particular group you can target in the event of a mishap, such a huge sum of money being given up might not be a very good idea, especially if you do not have enough in the first place. Altcoins are relatively new compared to Bitcoins and are well within the affordability range of people, and some of them have shown incredible progress in the past few years, further garnering the attention of investors. The benefits of Altcoins are:

  • Faster Transaction Speed

The Bitcoin network was never designed to sustain the immense amount of traffic and transactions that it carries out, and even the blocks of data in the network are never misplaced or discarded, it takes about 10-15 minutes for a new block of data to be added on the network. Altcoins do not need that kind of extra time because the traffic on their network is not nearly as much and they are not dealing with transferring such expensive currencies

  • Better Design

The initial design of Bitcoin will be its structure for the future because the network cannot stop now for maintenance and upgrading. Altcoins are designed keeping in mind the areas where the Bitcoin design failed, so the invention of these new areas of exchange will attract more people because the chances of them losing their investment to technical flaws will be minimal.

  • Cheaper

It is always wise to step in the world of a new exchange market from the bottom, so that even in the event of a loss the sum of money on the line is not enough to make you regret your decision. Altcoins are, overall, a lot cheaper than Bitcoins and things are bound to stay that way for the upcoming years because Bitcoin has established an irreplaceable customer backing in the market.

  • Better Relative Returns

Bitcoins are indeed soaring high, but how long will it be before the currency finally meets its saturation point and begins to fall? Nobody has an answer to the question, but no one can say with certainty that this won’t happen either. Relative to Bitcoins, other currencies might offer a greater percentage increase in profit because the more money pooled into them the more they can be of use to the purchasers.

Comparison with FIAT Money

If you are confused because of all these technical terminologies used in the article, do not worry because Fiat money is simply the money you use in your regular life. It is basically the paper money and coins which have a value assigned to them by the government of a country, and the value fluctuates in a market of its own called the Forex market (Foreign Exchange). All countries in the world use fiat money as legal tender at one level, and rumors have been heard about how some countries like Sweden are planning to move towards a cashless society run solely on credit and, surprisingly, cryptocurrencies.

Will a market with Altcoins available as legal tender be better than one which uses standard Fiat money?

The answer to this question can only be given once a governance structure indeed does decide to introduce cryptocurrencies legally into its system. The major trouble in doing so is the fluctuating values of Altcoins, which makes them very unreliable, especially because no government reflationary or inflationary action can be taken since the causes affecting these currencies are pretty much unknown.

Finally, these currencies are not as secure because they have easy access from the internet and regardless of efforts made to make them more secure, third parties are feared to have access to them. However, there is no denying that Bitcoin and Altcoins will go on to play a significant role in our future.

14 Comments

  • Evan Lyres November 2017 - Reply

    Altcoin refers to the alternatives that certain developers have introduced as alternatives to BitCoin. Just like BitCoin, these crytocurrencies differ in certain aspects to FIAT money; or regular cold hard cash. Altcoin, which includes Litecoin and Etherium, claims to be better than BitCoin due to far superior programming and security protocols. The main benefits of investing in them include faster speed transaction, cheaper, better design and better relative returns on investment.

  • Elizabeth Green November 2017 - Reply

    Hi there!
    Altcoins vs. FIAT money has started the game. Altcoins must definitely win. Because of the great features of Altcoins, its robust design and security, faster transaction speed, make it very acceptable and familiar to the investors.

  • Sam November 2017 - Reply

    As mentioned in the article, Altcoins offer a sense of affordability unseen today with Bitcoin, something that is attractive for the average investor. Faster transaction speeds, better design, and better relative returns – why would you not consider it? Fiat money may be accepted more places, but Altcoins are attractive as a long-term investment.

  • JT November 2017 - Reply

    Hi Krypto Graphe,

    I saw you tweeting about technology and I thought I’d check out your website. I really like it. Looks like Krypto Graphe has come a long way!

    Building a mailing list like you are is so important too, I think people would really like to be signed up to what you have to share.

    Good job on the social buttons, social media is so powerful these days

    You should consider installing an SEO plugin like Yoast or something, theres loads of good free ones.

    Also places like axtschmiede.com are worth checking out.

    • kryptographe November 2017 - Reply

      JT – Thanks for your comments and your suggestions ! Will check out the plugin and website.

  • Lee December 2017 - Reply

    This article is fascinating especially with all of the current buzz and interest in bitcoins and how far they have come. The soaring price of bitcoins is both exciting and very scary for new and beginner investors. Altcoins may be the alternative for people who want to start investing in cryptocurrencies but really cannot afford to jump directly into bitcoins now. The challenges of an unstable currency are being addressed with these younger coins which allow an access point and learning opportunity for naive investors who want to learn as well as build a dynamic portfolio.

  • Kimberly Kuhlman December 2017 - Reply

    Hi, I live in a country where doing foreign transactions is very hard, government imposes strict rules and every foreign transaction is monitored. Last month I had to send some money in US and after doing everything I could and wasting 23 day, I was very angry. That’s when I bought bitcoins and sent the money. It took me only 4 hours to do my research and do the transaction. If you ask me why I love altmoney, it’s because it’s out of government’s reach.

  • Aurelia June 2018 - Reply

    It’s clear that investing in altcoins is a good idea. The question is where to invest? I think investing in 10 or 20 altcoins that seem to have the most potential could be the best choice right now.

  • Natalie Rhone June 2018 - Reply

    I was totally confused with FIAT money until I read this. I thought there was another coin that I had not heard about just yet. Thanks for clearing things up on that one. Also, the comparison is really not one at all. There is a lot of great things that are coming from the cryptocurrency market.

  • Jon Jeans June 2018 - Reply

    I think you hit all of the major needs when it comes to the cryptocurrency market. The super fast transactions are going to be the hot sellers at this time, especially when you are talking about banks and other international money exchanges.

  • Ethan Martinez July 2018 - Reply

    Interesting read! I definitely think that if altcoin were established as a new legal tender the whole point of it may end up backwards.

  • Oliver Williams July 2018 - Reply

    This is inspired. I am hopeful that one day the world will be totally online. I am sure this wont be as far off as some think.

  • Ben Amstutz July 2018 - Reply

    I am super interested to see where cryptocurrencies are in the future. I’m not sure if they will ever become the main source of money or if they will die out. I’m in for the ride!

  • Josh Sprunger July 2018 - Reply

    Im intrigued to see how more and more cryptocurrency types impact BTC and even physical money as they continue to grow.

Leave a reply

THE PULSE OF YOUR ALTFOLIO

Know exactly how your cryptocurrency portfolio is doing, anytime!

Why live in suspense when you can have clarity?

No surprises. Only clarity on how your crypto Altfolio is performing.

We make it easy for you to track your crypto currency investments.