Litecoin is one of the first open-source altcoins based on the original Bitcoin code. It was initially a strong competitor to the first cryptocurrency. However, as the cryptocurrency market expanded, Litecoin’s popularity gradually declined.
What are altcoins?
Almost everyone knows about Bitcoin today. But not everyone realizes that there are many alternatives to the forefather of cryptocurrencies that have huge potential.
Altcoins are all cryptocurrencies created after Bitcoin. They got this name because they were developed as an alternative to BTC. For the first time in 2011, the Namecoin altcoin appeared and was completely similar to bitcoin in functionality. Then enthusiasts began to develop their own cryptocurrencies.
What are altcoins created for? Bitcoin users wanted to improve the first cryptocurrency and diversify electronic payment options for every aspect of people's lives. In total, there are about 1,500 types of coins at the moment.
The main disadvantages of BTC:
- Transactions are delayed. The bitcoin algorithm does not allow you to make transactions quickly. It contains a large number of blocks, each of which copes with the calculations rather slowly.
- The level of anonymity is not reliable enough. Although all transactions are encrypted, it remains possible to track the participants of the transaction. Alternative cryptocurrencies use new encryption methods.
- Expensive mining. Mining bitcoin is really expensive and the complex equipment required does not make the process easy. For the extraction of altcoins , other protocols are used and they are spent much less.
- Required functionality is missing. Bitcoin cannot create a smart contract, unlike altcoins, it only serves as a tool for calculation.
Each new altcoin solves a certain technological problem and develops innovations, thereby improving cryptocurrencies. For traders, altcoins are also useful for diversifying investments: the more options there are for investing in cryptocurrencies, the less risk there is.
