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Altcoin
What Is an "Altcoin"?
The term “altcoin” is used to describe any cryptocurrency that is not Bitcoin. As Bitcoin was the first cryptocurrency, any cryptocurrency that was created after was treated as an "alternative." Some people, particularly bitcoiners, consider Ethereum to be an altcoin as well. Others now exclude Ethereum from the list of altcoins and consider all cryptocurrencies other than Bitcoin and Ethereum to be altcoins.
What Is the Difference Between Crypto and Altcoins?
Altcoins are all cryptocurrencies other than Bitcoin and Ethereum. Bitcoiners like to stress that Bitcoin is not a cryptocurrency but its own category. However, there is no difference between crypto and altcoins.
Types of Altcoins
There are several different types of altcoins.
Payment Tokens
Payment tokens focus on payments as their main use case. These tokens are often not considered to be "real" cryptocurrencies since they tend to be more centralized.
Utility Tokens
A utility token is one that can be used for a specific purpose within its ecosystem. For instance, paying for gas can be considered a utility.
Governance Tokens
Governance tokens are used to vote on a project's governance. For example, governance token holders can influence the level of fees a project can charge on token swaps.
Memecoins
A memecoin is a cryptocurrency that was created as a joke and with no obvious utility. For example, Dogecoin and Shiba Inu are two popular memecoins.
Stablecoins
Stablecoins are cryptocurrencies that are pegged to currencies like the dollar and are often backed with collateral in fiat currencies. Stablecoins are not "real" altcoins since their value does not oscillate like other cryptocurrencies.
Pros and Cons of Altcoins
Altcoins have several different pros and cons.
Pros
Variability: There are thousands of altcoins, each with its own unique use case.
Upside Potential: Altcoins can multiply in value much faster, thanks to their low market capitalization.
Innovation: Altcoins bring new and innovative solutions to the market.
Cons
Volatility: Altcoins are much more volatile than Bitcoin or Ethereum.
Illiquidity: Altcoins are also much more illiquid and can drastically oscillate in value.
Vaporware: Many altcoins can be considered vaporware because they have no real use case.
Open Interest
Open interest refers to the total number of outstanding derivative contracts, specifically futures and options, that are held by market participants at the end of each trading session. |
Black-Scholes Model
In simple terms, it is a mathematical formula that gives the fair price of stock options, allowing investors to calculate whether they are overvalued or undervalued. |
Consensus Layer
The consensus layer is the backbone of any blockchain network, performing the vital role of facilitating agreement among nodes on the true state of the blockchain. |
AI Coins
AI coins are designed to streamline AI-related transactions and interactions, all while upholding transparency and security through blockchain technology. |
Leased Proof of Stake (LPoS)
Leased Proof of Stake (LPoS) is a consensus mechanism that allows cryptocurrency holders to lease their coins to nodes on a network. |