We are all aware of bitcoin and its growing popularity around the world. Apart from bitcoin, there are many other virtual coins that are in circulation. All these coins held together are called altcoins. In other words, altcoins – a combination of two words, “alt” and “coin” – are cryptocurrencies other than bitcoin. The infrastructure is the same for Altcoins and Bitcoins. Having said that, there are many things that set the two apart from each other. Altcoins were created after the success of Bitcoin. But the rules for altcoins were slightly changed so that they could attract certain specific users. Today, altcoins offer superior transaction speed and energy efficiency.
There are many different types of altcoins available depending on their purpose. So, what are the advantages and disadvantages of investing in altcoins? let’s find out.
Benefits of Investing in Altcoins
1) Lots of options: There are many altcoins in the market. This makes it easy for the investor to choose based on returns, acceptability and other competitive advantages.
2) A better version than bitcoin? It would not be wrong to say that altcoins are better and better versions of bitcoin in many ways. In terms of technology, they are more advanced, as they came after bitcoin. Even in terms of transaction speed, many altcoins outperform bitcoin.
3) Stability: Unlike bitcoin, for altcoins, the price volatility is generally low. Unlike the volatility associated with bitcoin, this would be a huge advantage for the investor as it is more stable.
Cons of Investing in Altcoins
1) Lack of Acceptance: Many people are still not fully aware of altcoins. Thus, there is not much acceptance of the same in the market. And it’s hard to make out that bitcoin has become so popular anytime soon.
2) Risk: There are some risks involved when dealing with Altcoins. They can be prone to scams or other failures.
3) Market Value: Many investors were not aware of altcoins until recently. Of course, bitcoin is more popular and has a higher market cap than altcoins. Investors would not want to invest in something that would provide them with low returns.
However, ultimately the decision to invest rests on the individual investor. So, consider all the parameters before making a choice.