Whether you’re interested in cryptocurrencies or not, you’ve almost certainly heard about Bitcoin, the most widely used cryptocurrency in the world. In recent years, the value of gold has risen, and many people now consider it to be a highly desirable item.
But what exactly is Bitcoin, how does it vary from altcoins and stablecoins, and how do they work together to make money? Let’s take a look at the major characteristics of each, as well as how they differ and are similar.
What Is Bitcoin?
Bitcoin is the most valued cryptocurrency in the world at the time of writing. It is decentralized digital money, much like all other cryptocurrencies, and it is now the first known cryptocurrency to be in circulation. Satoshi Nakamoto founded the cryptocurrency in 2009, during the recession. Many others, however, feel that this is a fictitious name created to conceal the founder’s true identity.
We don’t know anything about Bitcoin’s originator, Satoshi Nakamoto, but he was the author of the Bitcoin white paper and the developer of the first reference implementation.
In July 2010, not long after Bitcoin’s launch, one bitcoin was valued at anything between $.0008 and $.08, depending on the exchange rate. It rose from $1 to $26.90 in less than a year’s time after that.
Over the next several years, it saw highs and lows, hitting a peak of more than a thousand dollars in 2013 but then sliding down to just over 300 dollars by the beginning of 2015. Despite the fact that its price was rising, Bitcoin remained mostly unknown to the general public for the first few years of its existence, until the cryptocurrency boom in 2017.
Before the year 2020, you might have heard about cryptocurrency, but it wasn’t uncommon to be unaware of it. The crypto business was still relatively obscure to the majority of the population, but that was about to change. Investors began to flock to Bitcoin for a variety of reasons, including the decentralized structure of the currency, the growing market capitalization of the sector, and concerns about macroeconomic instability.
As a result of the increasing investment in Bitcoin, its price has risen to levels that no one could have imagined. The value of a single coin had increased to $27 thousand dollars by the end of the year. However, despite experiencing several highs and lows since then, Bitcoin continues to be the most widely used and valued cryptocurrency in the world.
After learning about the most popular cryptocurrency available, it’s time to learn more about the others.
What Are Altcoins?
The word “altcoin” refers to any cryptocurrency that is not Bitcoin and is used to refer to any cryptocurrency that is not Bitcoin. This is mostly due to the fact that Bitcoin is extraordinarily well-known, whereas many other cryptocurrencies are not.
Furthermore, Bitcoin was the first cryptocurrency of its kind and continues to be the default cryptocurrency known by individuals who are not even somewhat interested in the cryptocurrency business. On top of that, additional cryptocurrencies were only established after Bitcoin’s popularity had been apparent, thus they may be seen as a type of sequel to the first.
In a nutshell, it’s a mashup of the words “alternative” and “currency,” considering that many people consider altcoins to be viable alternatives to Bitcoin. Given that the phrase “altcoin” is used to describe hundreds upon thousands of different cryptocurrency currencies, one could argue that it is a bit of a generalization.
The majority of altcoins, on the other hand, adopt Bitcoin’s blockchain ecosystem as a model for their own, ensuring that Bitcoin remains the world’s first decentralized digital currency to have this groundbreaking blockchain structure.
Ethereum, often known as ETH, is now the most valued cryptocurrency in the world. This decentralized digital currency was created in 2015 as a result of its creator’s distaste towards centralized systems.
When the producers of World of Warcraft nerfed his favorite in-game character, Vitalik Buterin came to the conclusion that decentralization was the way forward. He went on to construct Ethereum a few years later, and the coin saw a few ups and downs between then and 2020.
Then, like Bitcoin, Ethereum had an exponential increase in value in 2020, and it is currently the most valuable cryptocurrency in the world. Several other cryptocurrencies have achieved success in recent years, each building its own blockchain ecosystem with its own set of objectives, ambitions, and characteristics that distinguishes it from the others. However, these levels of success are not the norm for all cryptocurrencies.
Many people work hard to create their own cryptocurrencies, only to discover that their value is unlikely to increase any time soon. There are also a large number of scam coins, sometimes known as sh**coins, available. People frequently create these fictitious currencies in order to attract investors, only to abandon ship once the currency has attained a reasonable value. Rug pull schemes like as Squidcoin are a good illustration of what I’m talking about.
What Are Stablecoins?
Stagnantcoins, as the name implies, are cryptocurrencies that are intended to have a significantly more steady value over time than ordinary crypto coins. This is due to the fact that they are backed by something known as a reserve asset. These are assets held outside of the country that are governed by monetary authorities, such as conventional currencies such as the US dollar.
As you can see in the graph above from Coin Market Cap, Tether’s price changes are small when compared to the price swings that you’d observe for other cryptocurrencies. However, even the obvious peak that can be seen on the right-hand side of the graph corresponds to a decrease of $0.0118 in value. DAI and TerraUSD are two more instances of stablecoins that are collateralized with cash.
For those who wish to spend bitcoin while also reaping the benefits of its safe and decentralized nature, stablecoins may be a good choice.
In the cryptocurrency world, the term “altcoin” refers to any cryptocurrency other than Bitcoin, and it is often used to refer to any cryptocurrency other than Bitcoin. In large part, this is due to the fact that Bitcoin is quite well-known, whereas many other cryptocurrencies aren’t.
Apart from that, Bitcoin was the first cryptocurrency of its kind, and it continues to be the default cryptocurrency known by those who are not even remotely engaged in the cryptocurrency industry. On top of that, more cryptocurrencies were only developed after Bitcoin’s widespread acceptance had been established, therefore they may be considered a sort of sequel to the original cryptocurrency.
Briefly said, it’s a combination of the words “alternative” and “currency,” which is appropriate given the fact that many people believe altcoins are legitimate alternatives to bitcoin. In light of the fact that the term “altcoin” is used to refer to hundreds of thousands of distinct digital currencies, one may argue that it is somewhat of a generalization.
In contrast, the vast majority of altcoins use Bitcoin’s blockchain ecosystem as a blueprint for their own, guaranteeing that Bitcoin remains the world’s first decentralized digital currency to be built on this ground-breaking blockchain structure.
Ethereum, often known as ETH, has risen to become the world’s most valuable cryptocurrency in recent years. This decentralized digital money was founded in 2015 as a result of the creator’s hatred for centralized systems, which led to the creation of the currency.
In response to the nerfing of his favorite in-game character by World of Warcraft’s developers, Vitalik Buterin came to the conclusion that decentralization was the way ahead. A few years later, he went on to create Ethereum. The cryptocurrency passed through several phases between then and 2020, with some ups and some downs.
In the next year, Ethereum had an exponential gain in value, and it is now the most valuable cryptocurrency in the world, surpassing Bitcoin in value. Over the last several years, several different cryptocurrencies have found success, each establishing its own blockchain ecosystem, with its own set of aims, aspirations, and traits that separates it from the others. These degrees of success, on the other hand, are not the standard for all cryptocurrency ventures.
Many people put out significant effort to develop their own cryptocurrencies, only to learn that their value is unlikely to rise in the foreseeable future. There are also a great number of scam coins available, which are frequently referred to as sh**coins.
These artificial currencies are commonly created by individuals in order to attract investors, only to be abandoned once the money has acquired a realistic value. Schemes that use rug pulls, such as Squidcoin, are an excellent example of what I’m talking about.