Cryptocurrencies have changed a part of the financial market landscape, which is increasingly proving to be an interesting form of investment. But did you know that this evolution of digital currencies could be related to Altcoins?
In this article, we will show you why this type of digital currency was so important to the world of cryptocurrency. You will learn what it is, who created Altcoins and if it is worth investing in them. Come on?
What is Altcoin?
Bitcoin is the most famous cryptocurrency and the most valuable in the world. But of course it is not the only one. If you follow our blog, you'll read more about some of the other cryptocurrencies we've broken into.
As the name suggests, Altcoins are alternative currencies to Bitcoin. That is, all other cryptocurrencies – apart from Bitcoin – can be considered Altcoins.
The first Altcoin was born in 2011, Namecoin, as a fork in the Bitcoin source code. After that, other altcoins began to appear, always innovating features and resources for inspiration and purpose.
Who created cryptocurrency?
The first known record of the idea of cryptocurrency dates back to 1998. Wei Dai, a member on an Internet mailing list called "Cypherpunks", suggested creating a new currency that would not require the control of a central body.
In turn, this new form of money would require an encrypted control system to validate its transactions. From that publication, the term "bit gold" emerged, which included a digital and anonymous payment system.
For this to work, Internet users were required to participate in the system, solving complex calculations to ensure encryption. Thus, in 2009, bitcoin was born, the first decentralized currency created by Satoshi Nakamoto.
Bitcoin uses hard codes, it is almost impossible to be counterfeit. This system encodes information and only the sender and receiver can understand it.
Difference Between Altcoins and Bitcoin?
Bitcoin was the first cryptocurrency that allowed to conduct financial transactions online between pairs of people, without the presence of middlemen, such as a government or regulatory body.
Most of the popular Altcoins use the same basic building blocks as Bitcoin. However, different monetary policy rules have been enacted to encourage different use and treatment of some of them.
That is, some policies, such as minimum spend and positive or negative interest on stored coins, may encourage or discourage purchases.
In addition, coin mining policies may operate differently from bitcoin and may also differ from each other, as well as the number of coins paid per newly mined block.
Among the best known Altcoins is Litecoin, created by Charlie Lee. It uses the Bitcoin protocol as a basis, but differs in its algorithm. Currently, Litecoin is priced around R$460.00 according to the CoinMarketCap website.
How does Altcoin Mining work?
All currencies must go through a registration, verification and verification process. Typically, it is governments and banks that carry out this function, controlling and preventing counterfeiting and currency crimes.
In the case of digital currencies, mining appears as a way to record transactions in a public book. In this way, mining is nothing more than the process of taking the balance of all payments and receipts, with an updated balance of currencies in each virtual wallet.
With this information, it is possible to confirm the validity of each transaction. But it is important to emphasize that this entire process is unique to each digital currency, as each has its own characteristics.
What are the trends in the cryptocurrency market?
Altcoins are gaining more and more positions in the financial market. Today, they are used as an alternative to investing money as well as buying products and services.
One of the main advantages of virtual currencies is the ability to transfer values to anyone in the world, without paying bank fees.
Since Altcoins are decentralized, they do not need to be controlled by any financial institution. All information is stored in a public registry, where the users themselves control the legality of these transactions.
Many companies already use cryptocurrencies as a form of payment. For example, it is now possible to buy Dell products with bitcoin and other altcoins.
Generally, those who invest in Altcoins believe that they are investing in the future, in a system that has the potential to break the paradigm and become something highly profitable in the years to come.
Altcoins are already a reality in the financial market. If you have an emergency reserve and are interested in investing in riskier assets, cryptocurrencies can be a good option.
