A List of the Top Altcoins for Newbies

If you talked to the average crypto investor a few years ago, very few would be able to tell you about coins outside of Bitcoin or Ethereum. You’d have some speaking about Litecoin or XRP if you were lucky, but these two were pretty much the only game in town.

There are now over 9,000 coins in circulation, and this number keeps on growing. If you’re serious about investing in crypto and aren’t interested in following the Bitcoin hype train, you have to get familiar with altcoins and consider adding a few to your portfolio. Let’s take a look at what altcoins are, why you should consider them, and some of the top altcoins on the market.

What is an Altcoin?

In short, an altcoin is any coin that is not Bitcoin. Since Bitcoin is by far the largest in terms of market cap and that’s not likely to change anytime soon, it became the gold standard. But many of those altcoins are very similar to Bitcoin. Some even branched from Bitcoin to form forks.

One of the examples is Litecoin. Bitcoin Cash is another. While both of these coins were once using Bitcoin’s protocol, they diverged from it to solve some of its biggest issues.

One of the things many people have been complaining about Bitcoin is how slow and expensive the transactions are. A lot of it has to do with Bitcoin’s small block size. Litecoin increased the block size so each block can contain more transactions. This alone makes a huge difference in how fast blocks are made available, which affects transaction price.

Not all altcoins are trying to be Bitcoin, however. Some are totally different and aren’t even meant to be used in everyday transactions. Let’s take a look at the different types of altcoins on the market.

What are Altcoins?

There are all sorts of coins on the market. Some are trying to solve real-life problems, like facilitating international remittances and transfers, while others are nothing more than a joke, like Dogecoin.

When you hear about altcoins, you’ll hear a lot about privacy coins. The anonymity cryptocurrencies offer got them a lot of bad press, but that’s actually what attracted a lot of buyers to them. And this is not only people trying to sell contraband over the dark web. There are many instances where someone may want to keep their transactions private.

We can think of people living in oppressive regimes, for instance. Some countries have even tried to ban cryptocurrency so it wouldn’t expose their financial system’s vulnerabilities. A lot of people in these economies may still want to shield themselves from over-inflation, and crypto is the only option in many cases.

This is why privacy coins count for a large portion of altcoins. They serve a real need and also tend to have features that make them great for regular transactions, such as high transaction speeds and low fees.

You also have altcoins that are to be used on certain platforms. One of the most popular is Ethereum. While Ether is often viewed as a speculative asset and a currency by some, that wasn’t the original goal. To understand the way Ether works, you have to understand Ethereum as a platform.

Ethereum is a proprietary blockchain where people can host decentralized blockchain-backed apps. Ethereum rents this space at a fee and requires owners to pay Ether to power their apps. The developers then pass these costs down to the users. However, Ether can be bought and sold on the open market, which brings speculation. But the coin does have a use outside of transactions and an intrinsic value, which largely differentiates it from Bitcoin.

You then have stablecoins. These are very different from other coins and they behave differently. If you look at coin charts, you might notice that some coins barely fluctuate while the rest of the market is on a wild ride. These coins will usually be stablecoins.

Stablecoins offer opportunities for investors to get direct exposure to the cryptocurrency market without the ups and downs that come with it. They do so by being pegged to a more stable asset, like gold or the US dollar, for instance. This can be done by backing the coin with the actual asset, crypto assets, or through an algorithm.

Another reason why stablecoins are so useful is that some exchanges will make it harder for people to buy cryptocurrency with fiat money. If you’ve never invested in crypto before, this is something you will need to take into consideration when picking an exchange.

What is Altcoin and How to Buy Them

The first thing you have to do when you want to buy altcoins is to get yourself a safe wallet. Do not keep your money on exchanges. This means that the exchange basically owns your money, and they can do anything they want with it.

Some exchanges have also gone under. There was even one case where an exchange owner reportedly died and was the only one to have access to the keys, which meant that all the assets in the exchange were locked off.

You will need to start by looking for one or multiple wallets and choose the right type. Software wallets are good for beginners and if you only want to make small transactions, but it is sensible to move to a hardware “cold” wallet like a Ledger Nano to store large amounts. Do not store them all in a single wallet either. If you lose it, you lose all your money, and there’s nothing that can be done afterward, so don’t only spread your assets, but have them protected as well.

Now that you have a wallet, you can start looking at an exchange. The first thing you have to consider is their history and what steps they take to make sure that funds are safe at all times. Good exchanges will have most assets closed off in cold storage somewhere. They will also have regular backups and use the latest encryption methods.

One of the most important factors to consider when picking an exchange for altcoins is the number of altcoins they offer. Don’t expect an exchange to have every single coin there is on the planet. Some will have nothing but a handful. Check how extensive their list is and if the altcoins you are interested in are in there.

What are Altcoins I Should Watch?

There are tons of interesting altcoins in the market that deserve your attention. Putting all your coins in the Bitcoin basket is a bad idea. There are so many other coins that have space for growth and are sold at much more reasonable prices.

Not to mention that Bitcoin does have some issues, and some of them might be insurmountable. So, it would be wise to stay on the lookout for any potential competitors. Here are some of the altcoins you should consider adding to your portfolio.

1- Ethereum

Ethereum is the number one altcoin and second only to Bitcoin in market capitalization. Ethereum is here to stay and is one of the most respected projects of its kind. The people behind the project are well known and have a great history.

One of the reasons why everyone should have money in Ether is because of its strong use case. Another interesting thing about Ethereum is that it has become the platform of choice for other altcoins. This means that their success will eventually end up benefiting Ethereum and increasing demand for the coin.

2 – Cardano

You may have not heard of Cardano, but it’s a well-known name in the crypto circles. The man behind Cardano, Charles Hoskinson, was also part of the Ethereum team. His goal was to create a more scalable platform than Bitcoin for transactions. He wanted it to be more energy-efficient, which is why it uses a Proof of Stake protocol instead of Proof of Work. Cardano is used both for the execution of smart contracts and for transactions. It is currently the fifth-largest cryptocurrency in terms of market cap.

3 – Tether

If you want to invest in a stablecoin, Tether is probably your best bet. It is the biggest coin of its genre and accounts for over 48% of all cryptocurrency transactions. It might not appreciate over the years, but it will provide a safe refuge for your crypto assets. Tether is accepted on virtually every exchange too and extremely liquid.

4 – Litecoin

Litecoin is one of the best altcoins you can buy, and one of the coins that have the most potential for mass adoption. It largely benefited from its association with Bitcoin but is so much more powerful. While Bitcoin can only process about seven transactions per second, Litecoin can process about 56. Transactions are nowhere near as expensive either. This means that it has a much greater chance of being used as a true transactional currency one day.

Everyone interested in crypto should look at all the available options. While Bitcoin is great, there are tons of alternatives out there, and you might stumble onto a few hidden gems.

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