Quiz: Altcoins

The altcoin market is an extremely diverse and innovative space. Most altcoins have unique use cases and seek to solve specific problems. Even the altcoins that function as a payment coin like Bitcoin generally offer improvements on the technology.

Altcoin is short for alternative coin and in most definitions applies to every cryptocurrency that is not Bitcoin.

Litecoin, released in 2011, was designed to function just like Bitcoin but offer faster and cheaper transactions. Litecoin transactions are roughly four times faster and 10 times cheaper than Bitcoin. 

Altcoins are popular for a number of reasons. Here are a few. One, they allow people to have early involvement with innovative technology. Two, they have the potential for a very high return on investment, especially small-cap and micro-cap altcoins. Three, although they offer similar services, they are often faster and cheaper than Bitcoin and Ethereum.

A governance token allows stakeholders to vote on network proposals and upgrades. Examples of governance tokens are UniSwap, Maker, and Cosmos.

Stablecoins, governance tokens, and utility tokens are all types of altcoins. In addition to these there are others like security tokens and NFTs.

An initial coin offering (ICO) is very similar to an initial public offering (IPO) in the stock market. They were a very popular method for crypto projects to raise funds in 2017/2018. ICOs are not as popular now, but they still exist in various forms.

There are a staggering 10,000+ altcoins on the cryptocurrency market. Most of these altcoins are innovative applications of blockchain technology and aim to solve a specific problem.

Stablecoins are global digital currencies that are pegged to first currencies like the U.S. dollar or the Euro, which means that they don’t fluctuate much in value. As such, they provide a safe space for investors to keep their money without being subjected to the typical volatility of the crypto market.

Coins are native to their own blockchain, for instance Bitcoin, Ethereum, Dogecoin, and Litecoin. Tokens on the other hand are built upon another blockchain, such as Ethereum. While coins are predominately used to pay for goods and services, there are coins that have different or separate functionality. There is no limit to the amount of coins or tokens you can have.