What are Altcoins?

Cryptocurrencies are the new paradigm shift that has been looming on for some time now. To understand crypto-currency we need to go back to 2009. When someone named Satoshi Nakamoto put out a software that slowly but steadily started to change the world. It was called Bitcoin and it was the first form of truly digital money. Its most important aspect was the technology called Blockchain which will have an impact on society on the same scale that internet did. What are Altcoins Since 2009, Bitcoin is well and alive and thanks to it being an open source project other people in the scene started to experiment with it to see if they start a similar blockchain like the Bitcoin Blockchain. One of the first successful implementation was called Litecoin and it was created to be the silver next to Bitcoin which is also called from time to time as Digital Gold. First blockchain implementations after Bitcoin were called Altcoins because people saw them as an Alternative Cryptocurrency Coin that is similar to Bitcoin. After Litecoin, a lot of other altcoins also emerged with different focuses like Litecoin did. One of the other important altcoin is called Ethereum which launched on 2015 with a focus on programmable money where anyone can create smart contracts and similar functionalities on Ethereum Blockchain. Ethereum since then became a global catalyst for more altcoins in the industry thanks to its powerful smart contracts. In 2016 Ethereum updated their blockchain with a new functionality called ERC-20. This is the name of the smart contracts that lets people to launch their own tokens using the Ethereum Blockchain. This caused an enormous arms race over the years since today and a lot of startups emerged by launching Initial Coin Offerings using the ERC-20 smart contract which let anybody to invest in their token/company by exchanging their Ethereum to the tokens they wanted to buy. All this process is very easy and anybody could invest there is usually no limits on how you can invest and nobody cares about your ID and which country you are from. The ICO rush of 2017 is a clear sign that we are only going to see more and more altcoins emerging in the next few years. This is very similar to how a lot of internet startups launched in late 90s. Much of the altcoins launched on Ethereum blockchain are overly priced and users should be cautious about their investment and should do their due diligence before investing to any altcoin. If we look at the Bitcoin’s dominance as in market cap share we can see a steady decline since late 2016 where a lot of new coins started launching together with the ICO craze through the ERC-20 functionality on Ethereum blockchain. In the same time a few altcoins emerged to be a real alternative to Bitcoin. One of them is called Zcash which is focused on privacy. What Zcash could do was basically enabling anyone to stay anonymous while doing transactions with Zcash. This is clear advantage over Bitcoin since Bitcoin is not anonymous as Zcash. Another similar coin is called Monero which is also focused on privacy and used more widely then Zcash. Ripple is another notable cryptocurrency with a centralized governance over its development and inflation. Unlike other cryptocurrencies where the rules like inflation and changes in the code often needs a major consensus between mining and developers of the project. Ripple stranded out in this by focusing on being an enterprise solution to make international money transfer faster and cheaper for banks. So it partnered up with different banks to make their payment network more secure and fast by using blockchain technology. Ripple also draw a lot criticism because it was seen as very powerful gatekeeper for as they can change the transactions without any restrictions unlike other cryptocurrencies where transactions are mostly private and non reversible that is why people trust decentralized coins much more than coins like Ripple. There are many altcoins in the crypto scene each with a different focus on how to leverage the blockchain technology to change the way companies and society work. A lot of them are over ambitious project claiming to be changing the an industry for good. However most of these companies don’t have a good product and are limited in both resources and network effect since they cannot make a better product than the current centralized platforms. However this does not mean that the future for decentralized platforms is bleak. Companies will have to figure out the incentives to draw more users and make sure their product is top notch so that the users would actually see the differences clearly. One of the important aspect of decentralized coins and platform is that they are very privacy aware companies and very strong supporters of more privacy. They think users should be able to control their own data the way they want. For example companies like Facebook aggressively track users behaviour to be able to target ads much better which in return makes their ads much more pricey for companies who are looking to buy ads on Facebook platform. In this cycle the users are being milked by aggressive tracking and Facebook makes huge profits out of this. Facebook actually never rewards the users for their data. This can be clear changed in the new decentralized network platforms. The future is bright thanks to Bitcoin and decentralization arms race that it has spawned. This is the first years of the humanity to gain more freedom over a lot of things with decentralized solutions spawning left and right. Those who are believe in this future should pay close attention to the networks that are launching with tokens as the value of these can go up exponentially.

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