The majority of cryptocurrencies are altcoins. Right now, they make up more than 60% of the crypto market, and their total daily value exceeds a trillion US dollars. You can create new tokens every day! This is why you and I need to urgently gain insight into the nature of altcoins.
Altcoin meaning and structure
Altcoins are all cryptocurrencies that appeared after Bitcoin. They quite often get into cryptocurrency news, the focus of attention of traders, miners, companies investing in cryptocurrency, and institutional investors. The name is easy to decipher: it is a combination of the words “alternative” and “coin”. The concept of an altcoin is to be “another currency” that is not the same as Bitcoin. Although the basic structure of altcoins and bitcoins is the same, as they share a common code. However, altcoins can brag about fixing the problems created by Bitcoin, such as high energy consumption requirements for mining or complex, yet unfamiliar to the industry, poorly working smart contracts.
What is an altcoin, and what types of it are there?
What does altcoin mean? As we’ve gathered, these are all tokens that are not Bitcoin. How many altcoins are there? A lot. Now, you can find more than 10 thousand altcoins on the exchanges. And this is not their limit. However, there are fewer main types of altcoins. We listed all of them below.
- Stablecoins
This is a trending cryptocurrency pegged to the exchange rate of a fiat currency or another rather stable asset like gold. Sometimes, stablecoins are pegged to cryptocurrencies whose value does not fluctuate much. “Stable tokens” must have reserves covering them in the asset which they are pegged to. That is, if 10 stablecoins are sold on the exchange, pegged to the dollar in a ratio of 1 to 1, then these coins must be covered by these ten dollars. Stablecoins use the altcoin price prediction formula: the blockchain will behave like a fiat currency.
- Memecoins
These are coins that grew out of memes and became a trading tool. The most obvious example for this type of altcoins is Dogecoin, Elon Musk’s favourite token, inspired by a dog meme. The value of such coins depends only on the community; they are not backed by reserves, so their volatility can reach tens and hundreds of percent within a single trading day.
- Utility coins
These are coins that give users access to the products of a certain company. You can use them to buy products, pay for services, order gifts, well, just perform your daily financial transactions. An example of such a coin is Filecoin, a utility token used by the blockchain network of the same name, which offers a storage place for your files. You buy this place for the coins.
- Governance coins
These are DeFi tokens that give an investor the opportunity to participate in the decision-making process related to a particular blockchain network. An example of such a coin is Maker.
- Security coins
These are securities transferred to the blockchain. Investors who have converted their assets into security tokens often receive dividends in the form of other tokens held within the altcoin platform rather than in the stock market.
- Forks
This is the division of the blockchain into several branches with the main goal of changing the way the blockchain is built. There are two types of forks: soft and hard. Soft forks are compatible with old versions of the blockchain network, while hard forks radically change the network, requiring new mining software in the updated blockchain. A great example of a fork is Bitcoin Cash.
Altcoin mining
Altcoin mining is still a good way to make money. And given that not all altcoins require the same amount of effort from miners as Bitcoin, this option can be considered almost a passive income. So now you might wonder: how do you mine altcoins? You can keep currencies in the wallet, receiving a reward for this, or mine them using special equipment. Some believe that Kadena altcoins (KDA) are the most profitable to mine; after all, with them, your income per hour can be about $95. However, don’t forget that you’ll need to pay your electricity bills from this amount. Notably, Ethereum is also on the list of the most profitable coins to mine.
Altcoin prices
Do you want to find out how much the crypto you are interested in is worth? You can find information about the cost of an altcoin on any cryptocurrency exchange. If you want to compare prices with each other, see how prices have changed, and assess the volatility of each coin individually and in comparison, we recommend using the following three services:
- TradingView (“Markets” section).
- Investing (“Crypto” section).
- CoinMarketCap some people call this platform ‘altcoin market cap’; you can indeed find altcoins here, but the service has a different name).
Where to buy altcoins
How do you buy altcoins? You can do this on any altcoin stock. Nevertheless, be careful when registering on such services: some of them require confirmation that you are 18 or 21 years old, that you are not a miner or a large investor, and so on. There is even an app that asks users to upload electricity bills to their accounts as proof that they are not mining crypto. You won’t find it among the altcoin exchange services listed below. They also offer cheap altcoins, so we advise you to study the list carefully.
- Binance
- FTX
- Coinbase Exchange
- Kraken
- KuCoin
- Gate.io
- Bitfinex
- Gemini
- Huobi Global
There is no such thing as a separate altcoin wallet — almost all wallets are suitable for different cryptocurrencies, including altcoins.
Best altcoins to invest in 2022
What should you invest in in 2022? What are the top altcoins this year? We are here to tell you which coins are worth buying right now in this list of altcoins.
- Ethereum (ETH)
In the first place is, of course, Ether, the second most famous token after Bitcoin, one of the most popular altcoins. Experts predict that its price could rise by 400%. This is not surprising: after all, it has already risen to such levels after its issue.
- Binance Coin (BNB)
This is a coin from the platform of the same name for buying and selling cryptocurrency. Analysts believe that its value will rise to more than $600 apiece in 2023, so there is no doubt about its worth.
- Ripple (XRP)
This currency has already surprised investors with the speed of its price growth, so the market is set to buy it. It does not consume a lot of energy, quickly conducts transactions, is considered an eco-crypto and has a high investor confidence index — what else do you need to be in trend in 2022?
- Avalanche (AVAX)
One of the few blockchains that scale with a high decentralisation rate. It can change the consensus algorithm depending on how it is used. In general, this is a fairly modern cryptocurrency that corresponds to the values of the blockchain community. Sure, it is not the cheapest, but it’s a great investment.
- Decentraland (MANA)
This is a token of the game of the same name, located in VR and based on Ethereum. The game is quite popular among crypto enthusiasts: you can buy land, goods, services, as well as monetise content in it. All in all, this currency is the best fit for portfolio diversification. It is quite possible that Decentraland will be the next altcoin to explode.
- Solana (SOL)
A currency with a fast transaction speed and a good developer pool. It allows users not to spend money on mining, while being suitable for increasing diversity in your investment portfolio structure. It can be volatile, so you might be able to make money selling it, should an opportunity arise.
New altcoins to watch: 2022 ranking
We have collected the top altcoins with most potential, which have appeared relatively recently, but have already attracted the close attention of the industry. They are not the newest, but the most promising tokens, and this is more important for an investor than anything else.
- Cardano (ADA)
Soon, this crypto can be considered a newcomer to the market: its update called Vasil is coming. It will increase network bandwidth and performance, as well as become a bridge to create a full-fledged ecosystem. Now, Cardano can be considered a good way to invest.
- Cosmos (ATOM)
This currency is still in development, getting update after update. The new version, Rho, will be released in the summer of 2022. The currency creators launched a developer accelerator programme and successfully built it into its ecosystem, so you will have something to monitor.
- Polygon (MATIC)
It is an Ethereum solution aggregator that improves the performance of altcoins based on it. It attracts interest from both developers and investors, as it helps to easily launch games on the blockchain, exchange NFTs, and conduct a huge number of transactions simultaneously.