Today we’re going to talk about alternative digital currencies or alt coins as these all happen to be. Alt as in alternative to Bitcoin.
Alt coins have had bad press inside the Crypto community for years. This was mainly due to lots of scam coins and badly conceived projects. But as the crypto space is beginning to get taken seriously by forward thinking entrepreneurs, the alt coin market is beginning to evolve.
When I am explaining the alt coin market to people, I say look at how the internet evolved. Serious people in banks said it could never be used for commerce as no one would trust entering their credit cards into a website. They would not trust buying from someone via a website. Well, luckily the founders of Ebay did not listen to the experts. But for every Ebay, there were hundreds of startups that got funded, even though business models did not really stand up to scrutiny, but there was massive FOMO – fear of missing out by investors. This created the dotcom bubble which popped at the beginning of the century. Just because hundreds of startups went bust, didn’t make it all a scam. Well the crypto market is playing out the same way. If you financial advisor tells you Bitcoin is a scam, do yourself a favour and find a new financial advisor. The advisor you want is one that educates himself so that he is aware of Cryptos and the value proposition. So if at some point, there is an opportunity that fits your risk appetite, you can have a sensible conversation with your advisor.
Now the first list is cryptocurrency and i know that a lot of parties do exert cryptocurrency as a generic period were related to all digital money but in fact cryptocurrency is a specialized category.
Cryptocurrencies like Bitcoin are mined by a computer. That’s how they come into creation and will be recorded and verified on a public record called a blockchain. There is an exception that we will make a note of, but for the most part crypto’s are mined currencies with a blockchain. Bitcoin was the first one and Bitcoin is the best known of course. Bitcoin is going to be capped at 21 million coins. This is probably gonna happen around the year 2140 so about 120 years from now. Basically the behaviour Bitcoin is created as it’s mined by computers and then those miners are rewarded in Bitcoin. We started with 50 bitcoin being the compensation way back when the genesis coin was mined in 2009 and then it was halved to 25, 12.5 and now with the most recent halvening which occurred in May it is 6.25. So the rate of creation of bitcoin slows down and as well as the compensation to the miners gets smaller. The halvening happens every 210,000 blocks on the blockchain and it takes about four years to got to get that halvening. I know it’s not exact but you know nearly every four years.
Bitcoin as it currently exists consumes a lot of electricity to keep its network operational. It is also has performance issues in the number of transactions per second it can handle and other issues that do not lend it to be useful as an everyday currency for buying and selling products or services. This created space for alternative crypto coins to launch to overcome these Bitcoin shortcomings. And peoples imagination did not stop there. Blockchain technology is revolutionising finance. It will transform banking, finance, e-services and government in the same way the world wide web transformed the way we consume information, socialise and purchase goods and services online, upending large companies in the process. UK retail is classic example of traditional firms going bust. There are many Alt coins available today with many more projects in the pipeline. Here are a few examples available today.
1. Ethereum (ETH)
2. Litecoin (LTC)
3. Cardano (ADA)
4. Polkadot (DOT)
5. Bitcoin Cash (BCH)
6. Stellar (XLM)
7. Chainlink
8. Binance Coin (BNB)
9. Tether (USDT).
10. Monero (XMR)
You can find out what each of the above coins are about here.