Hard to live in 2021 and have never heard of cryptocurrencies. So, these digital currencies, with Bitcoin as the flagship with a market value of $1 trillion, are gaining more and more interest from new investors. But the question is, is it still worth investing in Bitcoin?
First of all, let’s be clear that we are not financial advisors and you should do your own personal research before buying cryptocurrencies. But let’s see what altcoins are and if it is worth investing in them.
Let’s take it all from the beginning. We know that the number one cryptocurrency in the digital world is Bitcoin. Its price even reached $60K (April 2021). This fact, combined with the fact that its market capitalisation is already huge, $1 trillion, does not persuade new investors to turn to it. Altcoins are all cryptocurrencies except Bitcoin. Some of the biggest altcoins right now are Ethereum, XRP, Cardano, Doge, Ada, Polkadot.
Altcoins are considered the next Bitcoin. The difference, however, lies in the projects on which they are based. For example, Ethereum, which is the second “most stable” cryptocurrency, has gained the interest of investors in recent months. It is now priced at $2900 and has a market cap of $496 billion. Theoretically, small capitalisation cryptocurrencies are also the ones that have the most rise potential.
But this is not always the case. The smaller the market capitalisation, the more volatile they become. In the case of Bitcoin, for example, we do not see large fluctuations in price because it has a huge market cap. So, in the most volatile altcoins, yes the risk is greater, but so are the potential gains.
According to the data provided by the cryptocurrency market monitoring and recording bodies, there are over 5.000 cryptocurrencies today and over 20.000 different types of purchases. BTC is the oldest and most well-known cryptocurrency and most of all others, commonly referred to as “altcoin”. The term refers to any of the thousands of active cryptocurrencies, which aim to work in parallel with bitcoin and/or with each other or compete for dominance.
Satoshi has been around for over 11 years and now there are more than 5000 alternative altcoins next to the creator’s invention, as we mentioned earlier. Cryptocurrency market historians almost universally accept Namecoin as the first altcoin, while the term “altcoin” is said to have been used for the first time by developer Andrew Chow.
Namecoin was first introduced on April 18th, 2011 and its work aims to decentralise domain registration on the Internet. Between 2011 and 2014 the rate of altcoin appearances began to grow exponentially. Following Namecoin, Bitcoiners have witnessed the birth of Ripple, Litecoin, Peercoin, Feathercoin, Mastercoin and more. Today there are thousands of digital currencies that have used BTC based software and their developers have changed a few small details, such as einsteinium, litecoin, dash, zcash and novacoin. There are also Ethereum (ETH) forks, such as ubiq, ethereum classic and wanchain. Bytecoin has a unique base code and also has a plethora of forks, including monero, boolberry, and electroneum.
There is nothing special about Bitcoin that forces people to use it if something better comes along. Even if encryption is the future and every bit of data will be stored on a blockchain, Bitcoin could still become useless and lag behind as people switch to altcoin – either the current altcoins or the altcoins of the future. What gives Bitcoin its value, whatever the value is at the moment, is that people believe it has value. If several people agree on an altcoin they like best, Bitcoin could face serious “damages”.