The wide variety of digital cryptocurrencies which are functions similarly to a Bitcoin is known by the term, ‘altcoin’. It is claimed to be an abbreviation for the phrase ‘alternative to Bitcoin’. Also, it defines all the cryptocurrencies that are present or are emerging in the market and is not a Bitcoin. The creation of altcoins is mainly based upon terms and agreements which are different from the regulations associated with the world’s first cryptocurrency, also popularly known by the name, Bitcoin. Sometimes, altcoins include cryptocurrencies which are built from scratch and is new in the emerging market of digital currencies.
An interesting fact about altcoin is that they apply the identical foundational building blocks which were used by Bitcoin. This is convenient process for the individuals or group who are creating new forms of altcoins as Bitcoin provides a platform which is open for being used and is free for every individual. However, when any altcoin divides at a blockchain level, they tend to use a different set of consensus rules which will provide a totally different platform for the coin to have a distributed ledger. This method is also applicable for the case of new coins which are being created from the very beginning of the process of creating coins.
Most altcoins have different sets of monetary policies than others which is associated with the currency whose main purpose is to encourage the use of coins for a different range of purposes. Policies which include a barrier set for the minimum amount of coins spent, or implying positive or negative interest rates on coins stored, can either be beneficial for encouraging or discouraging the hoarding of coins. Policies related to mining coins might vary heavily form the ones which are used in the case of Bitcoins. These policies also include the quantity of new coins which are paid for every new block which has been mined.
Some altcoins are created just for the sake of discouraging using themethod of ASIC or GPU mining. This method of limitation helps in the reduction of the advantage a specialised miner may have, especially in the case of the Litecoin, the cryptocurrency upon which the half of the total quantity of altcoins are based upon. The blockchain of an altcoin may store a wide variety of metadata which may be able to show past records of transactions which are related to the coin itself or it may allow the coin to be changed to be named as an alternate assets.
Eventually, we can evaluate that the aim of some altcoins might be to enrich founders and offer them some opportunities. Also, many were able to discover several niche market based as a result of the difference in each of their methods which encouraged new individual who would mine and also the different uses the coins could be put to. Lastly, it is found that that since the beginning of the launch of Bitcoin, there has been a uprising of around 500 altcoins which were created. Some popular ones include examples of altcoins such as, NXT, Dogecoin, Litecoin etc.