Altcoins are a huge part of the cryptocurrency ecosystem. Without them the landscape would be vastly different and cryptocurrency adoption would be seriously set back. So what are altcoins?
‘Altcoin’ means alternative coin. Therefore, an altcoin is a coin that is an alternative to the first and most well known cryptocurrency, Bitcoin. The common abbreviation ‘alt’ is a short-hand way to refer to an altcoin.
Strictly speaking, every cryptocurrency that isn’t Bitcoin is an altcoin. However, as some cryptocurrencies gain notoriety the ‘altcoin’ label gets dropped.
Ethereum is a perfect example of this. Since most people involved in cryptocurrency are aware of Ethereum and the impact it has had on the space, ETH is rarely referred to as an altcoin.
How Many Altcoins Are There?
Truthfully, it’s not possible to know the exact number of altcoins because anyone can create one and we’ll never know about it. If we don’t know about it, we can’t count it.
Ranking websites like coinmarketcap require exchange listings for a coin to be listed which adds a degree of credibility to their counting.
We’re never going to know how many altcoins there are. New ones are always being made and older ones whither and die. It’s impossible to keep track of them all. Instead of worrying about how many there are, hunt for the ones that are right for you.
Investing in altcoins
Buying altcoins is a popular part of any cryptocurrency investment strategy. Historically, if you pick the right altcoin you can generate returns that dwarf those of Bitcoin. Successful altcoin investors in 2017 set themselves up for life with a humble amount of starting capital.
So if the potential returns are so big, what’s to lose? Actually… quite a lot.
Altcoins aren’t notoriously the most reliable investments. In fact, a huge number of people have actually lost money by investing in altcoins. What goes up must come down.
You also have to keep in mind that these cryptocurrency projects are under no obligations to perform for their token holders. You’re actually exposing yourself to a lot of risk by choosing to invest in an altcoin.
Altcoin investment is often akin to investing in a shaky startup. It could go incredibly well, it could go wrong. That’s just something to keep in mind.
Picking Your Investment
You have to pick your investment with care since there are so many to choose from. Don’t listen to influencers or shillers, do your own research.
Dive deep into the projects you are interested in and find out whether you see the potential of their business model. As an investor you should have no doubts about the business, leading you to anticipate longevity and success. Most importantly, the token should play a key role in the ecosystem.
If you can find a project that meets the bill, you’re golden.