In 2008, Satoshi Nakamoto unveiled the first cryptocurrency to the world. He created a phenomenon that has consistently grown through the years. Many people became interested in the idea of an alternative currency after seeing how some economies fell because of crisis. Investing in cryptocurrency became a viable thing for them.
Cryptocurrency explained
Cryptocurrency is a form of currency that you cannot hold, unlike paper money and coins. It is money that is hidden, private, and secured because of the encryption and coding that protect it. Each person who invests in the cryptocurrency market has his own code that identifies him. His cryptocurrency has its own encryption code, which makes it secure.
For a while, the bitcoin was the only alternative currency in the market. After the cryptocurrency caught the fancy of investors, more alternative currencies emerged. These alternatives to traditional money offered the same principles and fundamental concepts as bitcoin, only with a different name.
What is altcoin?
We mentioned that when cryptocurrency started, the bitcoin was the only one on the market. Altcoins are the alternative coins to bitcoin. So far, these altcoins have grown in number through the years. As of this writing, there are thousands of altcoins and many more are coming through. Many investors can now look over their altcoins and transfer from one system to another.
Altcoins use the same principles as Bitcoins, but follow a different set of governing rules. Some altcoins can be coded from scratch.
Altcoins are less expensive, less popular and less competitive. Even beginners can create their own altcoins. These are created with scripts and hashing algorithms.
Altcoins are fun and profitable investments, much like trading small stocks in the market. You can select as many altcoins as you can and invest small amounts. You can watch as they grow and you can even trade between altcoins when you want to consolidate your altcoins.
Advantages over Traditional Money
Cryptocurrency is a rebellion against the hidden fees that traditional institutions charge. It does offer anonymity and security across the board for all investors. Bitcoins are legal but not within the jurisdiction of existing institutions. Bitcoins can be accessed anywhere in the world, any time of the day. It is rare that investors cannot get access to their bitcoin. Charges of irregularity will result to restricted access. But the mentioned scenario is rare.
Disadvantages of Altcoins
While altcoins may have advantages, there are also some disadvantages. Here are some of the disadvantages which you will have to consider.
Ownership
– Most glaring is the fact that whoever owns the encryption code owns the bitcoins. As an investor, you only have the encryption code for the coins and it does not identify you as the owner. The potential for online theft is real. You could lose your money if someone gets hold of the codes for themselves. You would have no recourse to get it back once the codes are taken from you. It is the price you pay for the anonymity and also the risk you take.
Loss of Investor trust
– Many people say that investor trust is at an all-time high and still climbing. If an investor loses trust in the product, the possibility is real that the altcoin would lose its value.
Market Demand
– Like in the traditional stock market, market demands can and will affect altcoins. A bad publicity can ruin the value of altcoins even if the news is not true. It can destroy the credibility of your product. People can turn away from the altcoin and drive the price of the investment down. There goes your money down the drain. It is a risk, but such is the market even for cryptocurrencies.
Altcoin Outlook
The prospects of altcoins becoming more viable in the future seem to be bright. More and more people begin to understand the concept behind altcoins. More become willing investors and because of this, the market for cryptocurrencies thrives.
The allure of altcoins is not going to fade in the near future. It will continue to grow and demand will increase in the next few years. It could start a financial revolution which would complement the traditional money market. It could create a symbiotic relationship with the existing market and the altcoins community.
The future is bright for altcoins and if you want to invest, the time is now!
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