Cryptocurrencies (both bitcoin and altcoins) will be remembered for a long time, as they have piqued the interest of powerful governments all around the world. Cryptocurrency is without a doubt, the most essential product to come from blockchain technology, and it should not be underestimated. Many other digital currencies have followed in the footsteps of Bitcoin, which is the indisputable leader and was the first to be issued in 2009.
There are currently over 19,000 different digital coins or tokens that have been developed. They are not all the same, and their values and liquidity vary substantially. In this article, we take a trip down memory lane to see how far cryptocurrencies have come and how the first altcoin was born twelve years ago.
How It All Began
The first cryptocurrency was created in response to unhappiness with the current financial system, which prompted the development of digital money. Satoshi Nakamoto, a pseudonym presumably used by a developer or group of developers, created this cryptocurrency using blockchain technology.
When Nakamoto mined the first block of the chain, known as the genesis block, on January 3, 2009, the bitcoin network was born.. The first known commercial transaction involving bitcoin was the purchase of two pizzas for a whopping $10,000 in 2010. (who knew).
In 2010, Nakamoto vanished after mining approximately one million bitcoins and handing over the network alert key and control of the code repository to Gavin Andresen. Andresen then attempted to decentralize power. In contrast to the perceived authority of Nakamoto’s contributions, this opened the door for debate and thus raised legitimate concerns about the fate and future of bitcoin.
Despite numerous predictions that bitcoin would die, its performance has spawned several alternative digital currencies, particularly in recent years.
Since Bitcoin’s inception, the virtual and decentralized coin world has blossomed, with thousands of alternatives to the original token. As a result, the term Altcoin – derived from “alternative coins” – with regards to bitcoin was formed.
What Are Altcoins
While bitcoin has retained its status as the father of cryptocurrency, with a 45 percent market share (at the time of writing), this hasn’t stopped the emergence of new cryptocurrencies. Altcoins refers to all cryptocurrencies other than bitcoin, including yes, Ethereum.
An altcoin is any cryptocurrency that isn’t Bitcoin. This is an apt characterization given bitcoin’s massive market share, with all other coins – now numbering in the thousands – accounting for just over half of the crypto market.
Bitcoin is not only the first cryptocurrency ever established, but it is also the largest cryptocurrency in terms of market capitalization, earning it a special place among the other cryptocurrencies, which are referred to as ‘alternative coins’ or, as you might have guessed, ‘altcoins.’
Every Altcoin builds on the foundation of Bitcoin, but with subtle modifications in order to stand out from the crowd of miners and investors. Blockchain technology underpins the majority of alternative cryptocurrencies. Some, on the other hand, may employ a separate code design for purposes unrelated to Bitcoin.
Which Was The Very First Altcoin?
The very first Altcoin created was known as Namecoin. According to the founding team’s page, Namecoin was created by “an international team of academics and volunteers working to protect free speech online and save the world from an Orwellian surveillance state.” Leading the team was Vincent Durham.
There are some who argue that Testnet was the first altcoin, but it was reset after its coins began to be traded for value. Testnet 2 was launched on February 3, 2011, and some consider it to be the first altcoin.
However, Namecoin is the uncontested and widely accepted first altcoin. It was introduced in April 2011 with the original bitcoin codebase but with some small technology tweaks to fit the intended use.
Namecoin was founded with the goal of decentralizing the domain name system to improve internet security and privacy (DNS). DNS is the technique that converts domain names (such as cryptofinancegist.com) into computer-readable IP addresses.
People who use the internet commonly remember a website by its domain name, which they then input into their browser to access it. The DNS, on the other hand, translates this textual website address to numbers known as IP addresses on the internet.
The Internet Corporation for Assigned Names and Numbers (ICANN) is the entity in charge of DNS.. They determine all domain name major decisions and approval of domain name extensions. They also charge a fee for each domain name purchased online.
Namecoin was created with the intention of eliminating Internet censorship, removing centralized power from ICANN, and enhancing privacy. Namecoin domain names terminated in .bit, which is comparable to today’s .com, .net, and.us extensions.
How Much is Namecoin Worth Today?
Namecoin is still very active on most exchanges with a current price of $1.32 per NMC with a market capitalization of $19,490,735 USD as of May, 2022
Which Was the Second Oldest Altcoin?
Charlie Lee launched Litecoin in October 2011 as a peer-to-peer cryptocurrency and open-source software project. Litecoin was one of the first cryptocurrencies to enter the market and is now one of the top altcoins. The goal of Litecoin was to be the “silver” to Bitcoin’s “gold.” Litecoin is a worldwide payment network that’s completely decentralized. Lee created Litecoin in order to address some of Bitcoin’s flaws.
Litecoin was created as a speedier and less expensive counterpart of Bitcoin. Litecoin is nearly comparable to Bitcoin in terms of technical specifications. Because of these similarities, most bitcoin initiatives utilized Litecoin as a “test network.” Some developers used to test new bitcoin features on Litecoin first. This tradition continues to this day.
Due to blockchain technology, Litecoin may be used to move money directly between people or businesses. This ensures that all transactions are recorded in a public ledger, allowing the currency to operate a decentralized payment system that is not subject to government monitoring or censorship.
How Much is Litecoin Worth Today?
Like bitcoin, Litecoin is active on all major exchanges and has been one of the best altcoins of all time. It is currently trading at $69.66 and has a Market capitalization of $4,887,631,074 USD as of May 2022.
How Many Crypto Tokens Are There?
If you are wondering how many crypto tokens are there now, according to data from coinmarketcap.com, there are now 19,509 cryptocurrencies traded on 527 exchanges throughout the world as of May 2022. The great majority of these coins have collapsed or are no longer operational. Hence, investing.com says that 10,251 cryptocurrencies are live and valued, excluding non-active, defunct, or shitcoins.
Furthermore, there are around 300 million bitcoin users worldwide, with Asia having the biggest share. While more than 18,000 establishments currently accept cryptocurrency as payment.
Speculators seeking altcoins are spoiled for choice with thousands of cryptocurrencies available. However, much of the trade revolves around the biggest companies and those with the finest technological specifications, such as quick transaction speeds.
Categories, Types, and Uses of Altcoins
There are subtle differences (some big, some slight) between altcoins. It is possible for a cryptocurrency to fit into more than one category; for example, TerraUSD, which just failed, was both a stablecoin and a utility token. Let’s examine some of these briefly.
Stablecoins are cryptocurrencies whose value is tied to another asset, often the US dollar. They follow the underlying asset, attempting to maintain the coin’s price equal to the currency. Stablecoins are frequently backed by assets such as actual dollars (though bonds and other assets are sometimes used), providing a real monetary base. TetherUSD is a typical example of stablecoins
Since its inception, cryptocurrency trading and use have been characterized by volatility. Stablecoins seek to limit overall volatility by tying their value to real-world assets such as fiat currency, precious metals, or other cryptocurrencies. These assets are intended to serve as a reserve to repay holders if the cryptocurrency fails or has issues.
Mining coins are released into circulation by computer networks that solve complex mathematical problems often requiring a lot of energy. The world’s largest cryptocurrency – Bitcoin – is a mined coin likewise a huge chunk of altcoins.
Mining cryptocurrency is time-consuming, expensive, and only seldom profitable. Nonetheless, many cryptocurrency investors are drawn to mining since miners are rewarded with crypto tokens in exchange for their work.
When a celebrity, a famous figure or a group of enthusiasts take interest in a coin usually, an obscure coin created for fun or with no well thought out plans and the coin gains instant recognition amongst many persons in a very short time mostly due to social media promotion, meme coins are born. These types of coins usually experience very volatile trading value, however.
Dogecoin, which is heavily promoted by Tesla CEO Elon Musk is the most popular memecoin. Another very famous memecoin is Shiba Inu.
A security token is a type of currency that denotes a fractional ownership stake in another asset. A piece of art, for example, may contain security tokens that partition ownership and authenticate ownership. A company’s ownership might also be represented through security tokens which are often used to securitize more traditional assets.
Security tokens are digital assets that are traded on stock exchanges. The transfer of value from an asset to a token, which is subsequently made available to investors, is known as tokenization. Any asset, like as real estate or equities, may be tokenized. The asset must be secured and held in order for this to operate. Otherwise, the tokens would be useless since they would be meaningless. Because security tokens are meant to behave like securities, they are regulated by the Securities and Exchange Commission.
Payment tokens are meant to be used as currency—to exchange value between parties—as the name indicates. Bitcoin is an excellent example of both a payment token and a mined coin.
Utility tokens are used to deliver network services. They might be used to buy services, pay network costs, or redeem prizes. Utility tokens may be bought and retained on exchanges, but their primary purpose is to keep the blockchain network running.
Ether (ETH) is a good example of a utility token. It’s made to be used to pay for transactions on the Ethereum blockchain and virtual machine.
Governance tokens grant holders particular privileges on a blockchain, such as voting on protocol modifications or having a role in decentralized autonomous organization decisions (DAO). They are utility tokens because they are often native to a private blockchain and used for blockchain functions, but they have come to be recognized as a different kind due to their purpose.
Are Altcoins Good Investments?
Your grasp of cryptocurrencies and your financial goals will determine if altcoins are a viable investment for you. It’s worth noting that low-value tokens or coins provide great upside potential and a huge return on investment in a short time. But don’t let the upside potential of altcoins result in fear-of-missing-out (FOMO).
Altcoins may be extremely hazardous, with the less established altcoins being the most dangerous. Do your research as an investor before investing in any altcoins, just as you would with any traditional investment. A lot can be learned about an altcoin by going through their white paper for Initial Coin Offering (ICO). These include their value proposition, technology strategy, and commercial plans.
For those acquainted with stocks and shares, an ICO is akin to an initial public offering, or IPO. IPOs are issued by companies with tangible assets and a track record. It’s all done in a safe environment. In contrast, an ICO is based only on an idea presented in a white paper by a new firm that has yet to commence operations and has no assets.
However, many analysts feel that cryptocurrency is here to stay, thus altcoins are worth investigating. Some of the best altcoins to invest in include Ethereum, Solana, Litecoin, Cardano, and Polkadot.
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Altcoins continue to erupt into the public eye, with literally dozens of them in existence. While bitcoin maintains its unrivaled supremacy, altcoins are encroaching on the whole “cryptocurrency pie.” While there has been some volatility, the general market, with a current valuation of over 1.2 trillion dollars, is here to stay and has only one direction to go in the long run: higher.