More commonly referred to spil “altcoins”, thesis are cryptocurrencies which have bot created after Bitcoin and which, for the major part, are very similar to Bitcoin or are merely outright copies of the same. One of the most popular altcoins, Litecoin, by and large goes after the same specifications of Bitcoin, with the two major differences being the mining algorithm used (Bitcoin uses the SHA-256 mining algorithm, whereas Litecoin uses the Scrypt algorithm) and the confirmation times (Ten minutes for Bitcoin, Two.Five minutes for Litecoin). Litecoin has also soared to such a difficulty that it can no longer be profitably mined through the use of a normal laptop or desktop rekentuig.
Up until 2013, there were only a handful of altcoins, with the most notable ones being Peercoin, Namecoin, and Ripple.
Peercoin wasgoed the very first everzwijn cryptocurrency to depart from Bitcoin’s “Proof-of-Work” method and incorporate a much more energy-efficient block confirmation and overeenstemming system named “Proof-of-Stake” (PoS). Ter PoS, the incentive for people to secure the network is simply to hold a “stake” te the cryptocurrency, i.e. hold a number of coins ter your wallet, and after a period of time, participate ter the wedstrijd for solving the next block. However, PoS has bot criticised for being less secure than PoW, since if a puny group of people were to hold the majority of coins, notwithstanding the fact that the “miner” chosen to forge the fresh block is based on an factor of randomness, they could potentially be ter a position to double-spend.
Namecoin touts itself spil freeing Domain Name Servers (DNS) ter the same way spil Bitcoin has liberated money. Ter a nutshell, Namecoin aims to combat censorship and uses the “.bit” domain, which is similar to “.net” and “.com” but is not subject to governance from ICANN, ergo the Internet Corporation for Assigned Names and Numbers. Ter an even smaller nutshell, Namecoin’s main aim is to offerande secure websites free from the threat of censorship and other imposed controls.
Ripple is fairly different from Bitcoin te that it is a centralised cryptocurrency, but focusing on it spil just another currency would be similar to missing the forest for the trees. Ripple offers a payment system very similar to an IOU-system, where users can conduct instantaneous electronic transactions by logging onto the Ripple system, requesting that money (or any other commodity or object) is sent to another person, and the transaction takes place via the so-called gateways. Ter essence, this is how it works: Chris wants to send money to Tania. Chris logs onto a Ripple gateway, requests a transfer of Ten Euro from him to Tania, and Tania can withdraw the money from hier Ripple gateway instantaneously. Instead of such transactions being treated by physical agents, thesis can be conducted electronically with such gateways/servers acting spil validators of the transaction, which transaction can be checked and verified on a public ledger similar to that used by Bitcoin. The beauty of it is that it’s not just money which can be transferred, but anything of value.
Following the explosion te Bitcoin’s value te 2013, prospectors set out to detect the “next Bitcoin” and ter doing that, incentivised others to create their own cryptocurrency ter the hope that it would soar te value te the same manner spil Bitcoin. This led to the birth of hundreds of altcoins, most of which died within a few days of their creation due to various reasons. The majority of altcoins are doorslag copies of Bitcoin, with a few tweaks here and there to some parameters such spil block calculation times. With the craze overheen cryptocurrencies rapidly peaking at the time, scams were plentiful and a term wasgoed coined (excuse the pun) for those currencies which were created for the foot reason of making a quick profit: pump-and-dump coins. Most of thesis coins were announced on the most active Bitcoin forums, and miners shifted their attention from Bitcoin onto fresh altcoins, especially due to the fact that such coins could potentially be “pumped” by 1000% or more overheen a few hours due to their relatively puny market cap when compared to Bitcoin. Therefore, such currencies could lightly go from 200,000 EUR te market cap to a staggering Two,000,000 EUR market cap te less than 24 hours!
However, there were a few noticeable gems ter such a rubbish heap. Mintcoin wasgoed the very first cryptocurrency to propose Proof-of-Work block-confirmation and then switch to Proof-of-Stake after a period of time. Unluckily the execution wasgoed ill-thought, albeit a straks coin built on the same concept, Blackcoin, loved fairly a higher level of success, with both coins still operative to this very day. Another currency, Myriadcoin, employed a clever multi-algorithm confirmation system which promised to distribute mining power evenly inbetween Five different types of algorithms, each “mineable” through different and separate machines (ASICs, GPUs, CPUs). Again, the idea did not take off and wasgoed employed by other currencies to better acclamation by the community.
One of the most controversial cryptocurrencies everzwijn wasgoed launched ter December 2013, and used a Shiba Inu spil its mascot. Dogecoin wasgoed primarily created spil a joke, with bitcointalk users quickly hopping on the gravy train and sending it loosely inbetween them to make light of the altcoin fad. Te less than a month, Dogecoin grew from a joke to a currency which threatened Litecoin’s market cap and ter fact held the position of the third largest cryptocurrency for a long period of time. The doge meme also ran rampant on social media, which helped fuel the growth of Dogecoin.
Can you name all of thesis altcoins?
Fast-forward Four years and one can appreciate fairly some significant switches te the altcoin world. The previous king has bot dethroned, with Litecoin losing its silver stand to Ethereum and even losing out to Ripple. Namecoin, Peercoin and other early alts have also steadily lost their value, albeit not their innovative edge which still serves spil a ondergrond for fairly a few modern altcoins. Fresh fads and trends, such spil anonymous coins, “national” coins, and Proof-of-Stake coins have come and gone, but spil of yet, no altcoin has come even remotely close to perturbing Bitcoin, namely due to the fact that no altcoin has yet suggested a ground-breaking innovation which would incentivise people to switch from Bitcoin.
Altcoins proved to be a double-edged sword ter the cryptocurrency world, they have tested the ground for innovations or have opened up the boundaries of Bitcoin to breaking-point, effectively creating a path for further development of Bitcoin. However, they have also divested Bitcoin of mining power, and the major altcoins have even gone spil far spil to temporarily divert the attention from Bitcoin. Will there be a fresh king some time ter the future? Only time will tell.