By Panu KASAR
WHAT is an Altcoin? I believe by now you have heard of bitcoin. The first digital crypto-currency that is now becoming mainstream. Let me refresh your mind. Released in 2009 bitcoin is a secured peer-to-peer digital currency that is used on a network called the blockchain. The blockchain can be seen as a digital bank which facilitates the use of bitcoins. Designed with advanced cryptography it is airtight and so secured that the digital cash (bitcoins) cannot be duplicated or used twice. It has a decentralized framework and is not owned by any one ruthless government or institution. This gives more freedom and anonymity to its users.
Apart from bitcoins there are also other crypto-currencies being developed and used as digital cash. These are called “Altcoins”. The term “Altcoin” is used to describe any other blockchain based crypto-currencies apart from bitcoin. Officially right now according to Coin Market Cap listings (www.coinmarketcap.com) there are about 1,233 other crypto-currencies. All these have their trading value against the US dollar and are listed on online coin exchanges. Meaning they can be traded like fiat currencies (normal legal tender currencies) depending on demand, supply, circulation volume and can be used at any retail outlet that accepts them.
Let’s look at this from another perspective. Right now we have about 197 countries in the world. All these countries have their own currencies that are used within their geographical borders. We have the kina, Australians have the dollar, the Japanese have the yen and so on. When more exports are done in PNG we have more of the buyer’s currency being converted into kina increasing our circulation volume which raises the value of our kina giving us more buying power. When imports are done it’s the opposite. Our central bank controls these functions by applying economic trade mechanisms whatsoever. That’s the basics of currency dynamics.
On the internet it’s a completely different world. A digital world without borders. Therefore when you bring the blockchain into the picture it creates a lot of possibilities. The blockchain now acts as the decentralized digital central bank. It now becomes the focal point where all these crypto-currencies run off from. It provides the security, the transparency and the record ledgers for all these digital currencies. Its verification system is so secured that transactions are verified transparently by all users. This is the advantage over our current banking systems. No more bouncing cheques.
Altcoins using this system have been developed for all use cases. These digital currencies can be seen as financial systems that uses a token as its digital cash. To name a few we have Ethereum, Ripple, Steem, NEO, NoLimitCoin, Siacoin, Dentacoin and the list goes on. All these altcoins have a community (see it as a country on the internet) that accepts it as legal tender and use it to trade. These altcoins have a development team that takes care of its blockchain design and promotes its use case. What I mean by use case is that particular service this digital currency will be used for. For example the altcoin Dentacoin (www.dentacoin.com) was developed for the dental industry. Meaning if it starts to gain traction in the coming years patients can use this digital cash to pay for dental services at their local clinics. Actually a couple of dental clinics have already signed up to accept Dentacoin for their services. Dentacoin (DCN) right now has a market capitalization of US$48,352,180 and is listed 93 on the coin market cap listing officially ready for trading. It has a value of US$0.00016 per Dentacoin. Bitcoin right now listed number 1 on the coin list has a market capitalization of US$102,252,750,517 (102 billion) and a single bitcoin is worth US$6,140 which is about PGK19,711. Therefore with 1 bitcoin you can buy about 44 million Dentacoins. Hope you got that. Google more on this to get a grasp if you are interested to know more.
Though there are lots of altcoins on the trading market they are as good as their developers. With bitcoin it’s a different story. It was the first decentralized crypto-currency so it will still lead the way in its rise in the coming years. It’s more stable in terms of its price and more robust in its technology as it is supported by a good number of open source developer communities. This is proven by its acceptance into a wider range of traditional businesses all over the world who now accept it as legal tender.
As for the upcoming Altcoins you have to do your own research on its developers and communities to see if it’s worth investing in. Just like Dentacoin you have to do your own research to see if the dental industry is a market worth investing in. Go to the Dentacoin website and read about the developers. Find out about their credibility, their upcoming projects in terms of it continuous development. Has any big investor signed up with them? It’s just like buying stocks. You don’t go in blindly. You do your research.
An Altcoin is developed programmatically as a software and run on its own blockchain. Altcoin developers are now developing these digital cash for different industries. For instance there are digital currencies developed for online gambling, real estate, online storage and even social media. When a new crypto-currency is developed its creators release a blueprint of the digital cash called a Whitepaper. The Whitepaper will tell the public about its design and intended use purpose. They will also create a website and allow users to interact on their social media blogs. The website will give you basic information on the altcoin such as its launch date, its partners, its value, circulation volume, development timeline etc. Usually the launch will start as an ICO (Initial Coin Offering) to raise funds to further develop the altcoin project. The ICO launch is when the altcoin creators sell their initial coins to raise funds to further develop their plan as stated in their whitepaper. It’s actually a fundraiser. They have different deals during ICO launch. Some sell all their coins, others sell only a percentage of their stock etc. ICOs usually are sold cheaply some may be expensive. Investors who see potential in the venture buy into the stock and hope the future will be bright for them. You can see the full listings of upcoming ICO schedules on www.coinschedule.com. All the best.
The crypto-currency Steem is developed for Social Media. Did you know that there is a social media site just like facebook? It’s called Steemit (https://steemit.com). Steemit is no ordinary social media site, it’s a money making machine. Too good. You get paid for everything you do on Steemit. You post a picture and get paid if more people like it. You write a post and people comment, share, like and you get paid. Even people who comment gets paid if others like their comments. Now that’s what we call “moneytalks”. Simple as that. It’s a blockchain based service that uses the crypto-currency Steem which is right now listed 25 on the coin market cap listing with a value of $0.89. Just 24 places behind bitcoin. It has a BIG potential. According to marketrealist.com facebook is valued at US$408 billion. Imaging steemit a facebook rival who actually pays its users. It’s a goldmine and it just started and has the potential to overtake facebook. I let you do your own research and decide if you want to invest.
Altcoins are being released almost every week I believe we will have almost 10,000 different types of crypto-currencies by the end of 2018. Actually some countries such as India, Russia and China are working towards developing their own cryptos. It’s an expanding industry that will eventually become mainstream. On the flipside before buying into an ICO or established crypto market do your research and know more about a crypto-currency before buying. Only invest in the ones listed on www.coinmarketcap.com. These are the ones which have proof-of-works concepts and have successfully entered recognized exchanges ready for trading. Concentrate on the top 100 and make your research for investment. Many scams have also surfaced so be very careful. Many altcoins have popped up but disappeared again. Go to altcoin websites and read all about their whitepapers, their team, their partners and read their blogs, facebook page etc. Ask other investors and see what people say about the investment before you take the first step. It’s a new market which we are all going into so diligent research is the key to a good investment. Until next time, happy researching. firstname.lastname@example.org