What Are Alternative Coins
Anyone with a passing understanding of digital currency is likely familiar with Bitcoin. While Bitcoin is the best known and most used cryptocurrency, it’s not the only option for someone looking for an alternative to conventional currency. Currently, the market is filled with hundreds of alternative digital coins — also known as alt coins — that offer features and functionality different than Bitcoin.
As with any emerging product, alt coins range in quality and credibility. Many are just quick, cynical attempts to cash in on a highly speculative market. However, a small number represent genuine efforts to address the shortcomings inherent to Bitcoin, or to create solid, stable alternative cryptocurrencies with long-term potential for growth.
History and Current Options
Bitcoin was first released to the public in 2009. An open source platform, its code can be accessed by anyone. This, combined with Bitcoin’s rapid popularity and wild fluctuations in value, virtually ensured that more cryptocurrencies would follow suit. Today, the Bitcoin source code forms the basis of most alt coins. All share several common features, including decentralization, the use of a blockchain ledger for recording transactions, and the requirement that transactions must be verified using a timestamping scheme.
Today, Bitcoin remains the most popular cryptocurrency. A related product, Bitcoin Cash, was released in August 2017 to address scalability issues. Together, the two products retain a significant percentage of the digital currency marketplace. Despite this, new alt coins are released all the time. Some of the most popular include Ethereum, Ripple and Litecoin.
The Case for Alt Coins
Given the ubiquity of Bitcoin, what are the benefits of investing in alt coins, or using them as currency? The main advantage is investment potential — though Bitcoin currently holds the majority of the market, there’s no guarantee it will remain the cryptocurrency of choice in the future. Most alt coin prices are more affordable to purchase than Bitcoin and Bitcoin Cash, which lowers the barriers to investment and potentially increases the rewards should a product gain popularity.
Another argument for alt coins is that they provide a space to experiment with new features that can be incorporated into future cryptocurrencies. For example, Litecoin, released in 2011, was the first product to use Scrypt as a hashing algorithm, rather than the standard SHA-256 protocol.
Investing in Alt Coins
Market capitalization is the most common metric for measuring Bitcoin, Bitcoin Cash and alt coins. To determine market cap, multiply the weighted average price of a currency by its circulating supply — the total number of coins available for purchase. An alt coin with a larger market capitalization is used by more people and valued higher as a result. Sites such as Coin Market Cap provide helpful rankings of all cryptocurrencies by market cap and are essential tools for investors in alternative cryptocurrency coins.
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Learn more about what makes Aureus different from other virtual coin crytocurrencies by contacting us today.