Bitcoin & Altcoins
When you hear "crypto," what comes to mind first? If you're like most people, it's probably Bitcoin. That's no surprise.
Bitcoin, after all, is the pioneering crypto asset, frequently making headlines because of its spotlighting performance. But beyond Bitcoin, there are thousands of other crypto assets out there. These are called Altcoins.
What Are Altcoins?
Altcoins, or 'alternative coins,' are all the crypto assets that are not Bitcoin. Like Bitcoin, they work on blockchain technology but each has its unique platform and features. The first altcoin was created in 2011 which was Namecoin (NMC). Since the launch of the first altcoin, thousands of others have been created with their set purpose and features.
The Four Types of Altcoins
With thousands of altcoins out there in the world, each brings unique features that can be grouped into four main categories:
Mining-Based Altcoins
These altcoins depend on a process known as mining, or Proof of Work, to verify transactions and introduce new coins into its supply. Similar to Bitcoin, they employ miners who solve complex algorithmic problems to confirm transactions for the upcoming block. Miners are rewarded with the blockchain's altcoin for contributing to its network security.
Litecoin (LTC) and Bitcoin Cash (BCH) are two examples of mining-based altcoins.
Staking-Based Altcoins
Staking-based altcoins depend on a consensus process called Proof of Stake, or staking, for transaction validation and to increase their coin supply. In staking, participants lock up a portion of their coins to help secure the network, receiving altcoin rewards in return.
Ethereum (ETH) and Solana (SOL) are two examples of staking-based altcoins.
Governance Tokens
Governance tokens grant holders the ability to influence the underlying network's decisions. Token holders can propose and participate in voting on network changes.
Uniswap (UNI) and Maker (MKR) are examples of governance tokens.
Stablecoins
Stablecoins are unique altcoins that aim to offer stability by being pegged to underlying assets, such as fiat currencies maintaining a steady value. They are typically tied to a fiat currency like the US Dollar to ensure price stability.
USD Coin (USDC), Tether (USDT), and DAI are examples of stablecoins.
Altcoins and its Future
Altcoins present an appealing opportunity for investors looking beyond Bitcoin. They are witnessing significant growth, with new projects emerging in the crypto landscape. Each altcoin serves a unique role, and as the crypto domain expands, many projects under development could offer value in the future. Investors are excited to see what lies ahead for altcoins, with many now actively engaging in buying and selling these assets.
Where can you buy Altcoins?
For those interested in buying and selling altcoins, iTrustCapital offers access to over 30 altcoins, including Ethereum, Solana, XRP, Cardano, among others! iTrustCapital is a software platform that enables investors to buy and sell altcoins within a tax-advantaged retirement account. Why do investors choose iTrustCapital to buy altcoins? It’s the tax advantages! To learn more about iTrustCapital and the tax benefits, click below.
DISCLAIMER
This article is for information purposes only. It does not constitute investment advice in any way. It does not constitute an offer to sell or a solicitation of an offer to buy or sell any cryptocurrency or security or to participate in any investment strategy.
iTrustCapital is a cryptocurrency IRA software platform. It is not an exchange, funding portal, custodian, trust company, licensed broker, dealer, broker-dealer, investment advisor, investment manager, or adviser in the United States or elsewhere. iTrustCapital is not affiliated with and does not endorse any particular cryptocurrency, precious metal, or investment strategy.
Cryptocurrencies are a speculative investment with risk of loss. Precious metals are a speculative investment with risk of loss. Cryptocurrency is not legal tender backed by the United States government, nor is it subject to Federal Deposit Insurance Corporation (“FDIC”) insurance or protections. Clients do not receive a choice of custody partner. The self-directed purchase and sale of cryptocurrency through a cryptocurrency IRA have not been endorsed by the IRS or any regulatory agency. Historical performance is no guarantee of future results.
Some taxes and conditions may apply depending on the type of IRA account. Investors assume the risk of all purchase and sale decisions. iTrustCapital makes no guarantee or representation regarding investors’ ability to profit from any transaction or the tax implications of any transaction. iTrustCapital does not provide legal, investment or tax advice. Consult a qualified legal, investment, or tax professional.
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