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What does the Altcoin you buy say about you?

March 23, 2018 5:12 pm Published by

Wirex integrates with ShapeShift, letting you deposit nearly 50 different altcoins into your wallet. Although we don’t yet offer multi-coin wallets (it’s on the way though!), you can convert altcoins into Bitcoin and sell for fiat currency.

However, the term ‘altcoin’ can be misleading – it implies that other cryptocurrencies are essentially interchangeable with Bitcoin. This is far from true. While Bitcoin was designed to be a way of exchanging value, many altcoins serve a very different purpose and are not strictly currencies. Many merely represent a technology or service, or are a platform for applications.

Then there are ‘jokecoins’; cryptocurrencies without unique benefits, sometimes without any practical uses. Pepe Cash, TrumpCoin, Piety, and Dogecoin are just a few of the dozens of jokecoins. A few coins have been made as parodies – such as PonziCoin and Useless Ethereum. On the spectrum between useful and satirical, most altcoins lie somewhere in the middle. They aren’t necessarily outright scams or jokes, but they don’t offer anything new or practical. Most are just copies of other cryptocurrencies, with minor details changed.

If you’re looking to branch out beyond Bitcoin and diversify your crypto portfolio, there’s no shortage of options. It’s a good idea to choose an altcoin with a purpose you believe in, rather than jumping on the jokecoin bandwagon or choosing a coin simply because you think other people will do the same.  

Here are some of the ideas behind the most popular altcoins.

Ethereum: The original altcoin – except it’s not really a currency. Ethereum is a blockchain platform which allows developers to build decentralised applications, fuelled by a cryptocurrency called Ether. So while Ether is traded on exchanges in the same way as Bitcoin, it’s not meant to be a currency or an asset. The decentralised Ethereum network is run by computers around the world, and developers and users pay for computing resources with Ether. It’s often the first altcoin people buy when they start branching out from Bitcoin due to its solid use case and enduring popularity.

Ripple: A platform for the cryptocurrency XRP. Ripple is older than Bitcoin and has a lot of support from mainstream financial companies, so XRP is favoured by those looking for a cryptocurrency with the potential for widespread adoption. Understanding exactly how it works can take some time, so think of Ripple as a payment infrastructure, not a currency. XRP is used to pay transaction fees to the network.

Litecoin: Almost identical to Bitcoin, but designed to be faster. It’s a well known fact in the tech world that the first mover in a new space isn’t always the winner. A later mover who builds on the original technology and public interest can sometimes be the one to succeed. For those who are suspicious of Bitcoin’s anonymous origins, Litecoin founder Charlie Lee’s tech experience and participation in the crypto community are reassuring. Alongside Ether, Litecoin is considered one of the best options for those who are just getting started with altcoins and don’t want the risk of buying a newer currency.

Cardano: A research-driven smart contract platform, created by a global team of engineers and researchers. Cardano runs a cryptocurrency called ADA, but its main focus is on smart contracts, decentralised applications and other blockchain projects. The team aims to develop more advanced blockchain features, inspired by the scientific philosophy. Unlike many altcoins, Cardano is backed by influential organisations, works directly with regulatory bodies and has a clear vision for the future.

Their website describes it as “a marathon project involving feedback from hundreds of the brightest minds inside and outside of the cryptocurrency industry. It involves tireless iteration, the active use of peer review and shameless theft of great ideas when uncovered.”

NEO: Both a cryptocurrency and a blockchain platform for smart contracts and digital assets. NEO allows developers to write smart contracts in most popular programming languages, making it a more versatile and accessible platform. Like Cardano and Ethereum, NEO is all about the platform. As the white paper explains:

NEO is the use of blockchain technology and digital identity to digitise assets, the use of smart contracts for digital assets to be self-managed, to achieve “smart economy” with a distributed network… NEO will be committed to the development of its ecosystem, providing mature development tools, improving development of documents, organising education and training activities, and providing financial support.”

Steem: A blockchain platform for SMTs (Smart Media Tokens) which allow content producers to monetise their work without advertising. Users earn SMTs whenever someone likes, or in some way indicates approval of their work. Unlike advertising funded platforms, this incentivises users to create high quality content and to engage with the community. The detailed Steem white paper lays out the goal of improving the internet:

“Steem aims to support social media and online communities by returning much of its value to the people who provide valuable contributions by rewarding them with cryptocurrency, and through this process create a currency that is able to reach a broad market, including people who have yet to participate in any cryptocurrency economy.”

Dogecoin: The original jokecoin, which has managed to gain enough traction to be taken seriously and traded on exchanges. Distinguished from Bitcoin only by its lovable Shiba Inu mascot – an ancient dog breed closely related to wolves and a meme that refuses to die – Dogecoin is often used to send donations to the creators of enjoyable content

So, if you’re interested in branching out beyond Bitcoin, choose an altcoin with a mission you believe in.

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