Even though Bitcoins dominate the Cryptocurrency market, several competing digital assets are called Altcoins or alternative coins. To understand why you should buy Altcoin over Bitcoin, you need to understand the difference between the two. New is always good, and another new thing that you can try is Affiliate marketing. Affiliate meaning is highly beneficial for you to understand.
What are Altcoins?
Altcoins are Cryptocurrencies other than Bitcoin. Altcoins were created to modify or add features absent in Bitcoin to improve functionality. These are other virtual coins that are built on the same basic framework as Bitcoin but after the success of Bitcoin. So, they offer energy efficiency faster and cheaper transaction speeds.
They offer new features like low price volatility and smart contracts. Apart from Bitcoin and Ether being 60% of the Cryptocurrency market, Altcoins make up the rest. Sometimes, since they are derived from Bitcoin, their prices mimic its volatility on a larger scale. Still, analysts believe that with the developing Cryptocurrency trends, the price movements of Altcoins will soon be independent of Bitcoin.
Why Altcoins Instead Of Bitcoins?
Even though Altcoins are low In the market chains when compared to Bitcoin, there are several reasons why an investor should choose them over Bitcoin. Considering Bitcoin’s transaction times, high volatility, and transaction fees, many investors are not eager to face these barriers and instead choose Altcoins that offer faster and cheaper transactions.
Bitcoin has the highest transaction fees compared to any other digital currency. The current average transaction fee of BTC is $152.30. Alternatives like Ripple (XRP), the 4th largest Cryptocurrency in terms of market capitalization, have just a fraction of the transaction fee charged by BTC at $0.0042. Other alternatives are Dogecoin and Bitcoin cash, which are lower in transaction fees than Bitcoin. These fees keep changing and might even someday be as volatile as BTC now, but today this makes them a better option than Bitcoin in terms of transaction fees.
Many Altcoins even offer quicker confirmation of transactions than Bitcoin. This is very appealing to both merchants and customers for obvious reasons. But there are still risks associated with Altcoins since they are not as popular as Bitcoin and not as trustworthy yet. They are much smaller than Bitcoins and carry much more risks. An investor can never be too sure that their invested Altcoin will remain popular or viable, but that is a risk with all Cryptocurrencies. Even some Altcoins with very strong foundations have difficulty catching up with BItcoin. It is true for Altcoins that they might fade away if they don’t make a point strong enough to stick with the public.
The Bottom Line
Analysts believe that with the rise of Bitcoin’s prices, the money will start flowing from Bitcoins to Altcoins, but since right now both of those are linked, and one’s growth is another’s growth as well, that money will finally again flow back to BItcoin.
This makes it apparent that investors who want to diversify their portfolios should consider investing in Altcoins.