What is the best old coin

What are altcoins and what do they do?

In 2008, Bitcoin was introduced as the world's first peer-to-peer currency system, bringing with it an entirely new paradigm in the form of blockchain technology. In the past few years, Bitcoin has remained the best-known example of a crypto currency - and yet it is no longer alone.

In the years since Bitcoin's emergence, other cryptocurrencies have emerged that not only fill the space left by Bitcoin, but apply blockchain technology to various areas and challenges around the world

While these projects collectively are characterized by their emergence as digital currencies, projects that do not fall within the scope of Bitcoin are sometimes referred to as "alternatives to bitcoin" - or altcoins.

What exactly is an “altcoin”?

Altcoins can either take the form of an entirely new digital currency project or take advantage of the open source nature of other initiatives to achieve other goals. Specifically, altcoins can introduce various monetary policy measures that encourage different use cases or treatments, e.g. by introducing minimum spend, positive or negative interest on stocks, or even changing attitudes towards mining - the way new cryptocurrencies get into a financial system.

Many altcoins have started to be widely accepted and recognized since their inception alongside the media hype that brought Bitcoin to the global public.

Ethereum, perhaps the best-known altcoin, is the result of a development platform that does not serve as a peer-to-peer currency, but is supposed to program binding agreements - called smart contracts - into the blockchain itself.

Ethereum was used by the developers to exchange code and then build applications on the platform - and since Ethereum runs on computers all over the world, the New York Times referred to the project as "A single shared computer run by the users' network and on which resources are parceled out and paid for by ether"

Other projects have similar roots to Bitcoin. Litecoin, another recognizable altcoin, was designed by former Google engineer Charlie Lee; by using the basic bitcoin blockchain technology with additional improvements, Lee was able to turn Litecoin into a peer-to-peer currency network where transactions take place much faster.

Some altcoins are specifically designed to have a completely different use case or benefit. The Golem network enables users, for example, to rent out parts of the CPU of their computer (or rent parts of other CPUs) over a worldwide distributed computer network. The golem network uses golem tokens - a medium of exchange to facilitate the use of CPU cores around the world, which together form a global supercomputer.

At their most basic level, altcoins serve to decentralize the benefits offered by Bitcoin and provide new and interesting ways to use blockchain technology. In addition, they offer Bitcoin healthy competition in terms of both intellectual capital and tax value.

How are new altcoins introduced?

While many altcoins are created as the result of “forks” - either duplicating a cryptocurrency project and starting over in a “cloned” interpretation where changes can be made, or splitting a project in two due to community disagreement over a suggestion for improvement - some are created by the process of initial coin issuance, which, like an initial public issue, introduces a new coin or token into a market to raise capital or market capacity early.

Initial Coin Offerings - usually abbreviated to ICOs - are a method of raising funds using crowdfunding. This happens when start-up projects publicly sell their basic cryptocurrencies or tokens in exchange for Bitcoin or Ether.

ICOs are similar to the concept of Initial Public Offerings (IPOs) on the stock exchange, where investors can buy shares in a company; In ICOs, investors buy the project's tokens (which trade like stocks) and pay in a cryptocurrency like Bitcoin.

A company will go public to raise funds for further business development and expansion. ICOs serve a similar purpose; the initial sale, in which a project or company offers its tokens in exchange for cryptocurrencies.

Before a company can go public, a document - the prospectus - must be created. The prospectus must legally state the company's intention to make its shares available to the public and must meet the necessary standards of transparency to assist potential investors and avoid fraudulent money-making plans.

However, this is Not the case with ICOs and the only requirement that the company has to submit is a document in the form of a white paper containing the key information of the project. The weight lies in the fact that there is no standard for an ICO whitepaper, so any project can include and omit information at will. This leaves a lot of leeway for fraudsters to deceive investors with project promises, which are ultimately fraudulent machinations.

Also, because there is so little need for a legal protocol and framework, many projects have no existing track record and only the whitepaper can support the project. Since there is no record of the past, any evaluation of the project is based solely on future expectations of the project.

With cryptos, different digital currencies are in the foreground, such as Bitcoin and Ethereum, and with ICOs the rabbit hole goes even deeper.

How are altcoins valued?

Much like how Bitcoin's value is determined, the increased chance that an altcoin will get funding - and gain value - is attributed to providing solutions to growing markets with real demand, and having the support of top investors to a plethora of invested Support leads. Innovation using existing technology is also a winning catalyst, and when a project has a good team behind its development, it adds to the recipe for success.

Because of the difficulty of regulation and the associated opening up to scammers, investing in ICOs is known to be risky, resulting in a solid rock and a hard place for projects that have the potential for something big.

If you are considering investing in an ICO, the best advice would be to do as much research as you can and not invest what you cannot afford to lose. Interested investors can decide at any time to buy cryptocurrencies after the introduction of an ICO to reduce risk.

While it remains to be seen whether another cryptocurrency will ever reach the same highs and valleys of triumph as Bitcoin, altcoins offer both passionate investors the opportunity to put their claim into a project they can believe in, and experienced traders the opportunity to make money through well placed trades. For those buying altcoins, there might still be a blockchain project offering dizzying returns to dedicated investors.