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[unsplash](https://unsplash.com/photos/a-pile-of-bitcoins-sitting-on-top-of-each-other-5kApSEYgMqw)|
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Hello friends, welcome back to my blog. I trust you're keeping well. I want to also believe you got value from my last post, yeah! So today we would be looking at another topic of interest today. I just thought about sharing my thoughts with you.
Altcoin will be the subject of discussion today. I know I've got so many Bitcoin lovers here...that loves Bitcoin wholeheartedly but then I think diversifying wouldn't be a bad idea. Would it? Let get into the discussion.
|**Introduction**|
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No doubt the market is taking new shape after going through a prolonged depressed state since 2021. Many has interpreted this new phase to be the initiation of the next bull phase. Well, I quite agree with them because the market operates in cycles. The phase preceeding this was the bear phase what should then come next? The bull right...smiles
So many investors are looking for how take advantage of this period but don't really know how to go about it. Some only know about Bitcoin, of course it is the mother coin and the face of all cryptocurrency. I mean it literally comes to mind when cryptocurrency is mentioned.
If the above description I just made is you then today's post will benefit you so much. Have you heard of altcoins? If you have, have you taken your time to research about the them?. Anyways I would help you with some of these questions today.
Kindly note that this doesn't substitute your role as an investor to DYOR before taking financial decisions. This is just an educational contents and not some financial advice.
|**What are Altcoins**|
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The term Altcoin is actually a combination of two words. We have the **Alt** and the **coin**. Putting both together makes it the word Altcoin. The Alt there is an abbreviation of the word **Alternative**. We all know what alternative means. It's is used to describe something that can be used in place of another or acts as another. Now let me attempt to define what altcoin is.
Altcoins are coins that are not Bitcoin. In a more broader sense, I would say they are coin that are not Bitcoin or Ethereum. Most people are of the believe that any coin other than Bitcoin and Ethereum should be referred to as altcoin while some other believe they are coin that are not bitcoin (only).
Altcoin gained prominence in 2011. The first altcoin to be invented was **Namecoin.** It is also important to mention that most altcoin share similar feature with the mother coin but then they have their distinct differences which acts as an improvement on the shortcomings of Bitcoin.
This is the reason why many of them still thrive till today. They seem to have better use case and have also solved most of the major problem faced with Bitcoin such as volatility and her complex consensus mechanism, PoW.
|[unsplash](https://unsplash.com/photos/gold-round-coins-on-purple-surface-LtaZFutKCl8)|
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That said, altcoin have been able to create a niche for themselves over time as more and more investors have started tilting in their direction and have also seen it as an alternative to Bitcoin. Since there is demand for these coin, profit can be guaranteed in the long run.
But then it also very important we ensure that caution is not neglected, there are so many altcoin out there without a road map or use case, they are somehow useless and unserious. This is where your homework come in, I mean properly researching to find good and profitable ones.
|**Categories of Altcoins**|
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In this section I would briefly touch on the categories of Altcoins.
We have different categories of altcoin and I will be highlighting them below.
• **Mining- Based Altcoin**: These are altcoin powered by mining and of course you know they use the POW consensus mechanism example includes Monero, zcash litecoin etc.
• **Stable coin**: These are coin that were created to solve the volatility issue of the mother coin. They are designed to be at par with other stable asset an commodities. Most of these coin are pegged to a Dollar. Example USDC USDT.
|[unsplash](https://unsplash.com/photos/1-us-dollar-banknote-close-up-photography-AOJGuIJkoBc)|
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• **Utility Token**:These are coin created for utility within a network. They could be used for activities such as payment for services and redeeming rewards. Example of such coin is the Filecoin
• **Staking Based coin**
These coin are designed primarily to be staked. It goes through a process called staking where by those coin are locked up for transaction purposes. A reward is also given to any participants who has staked for this purpose.
• **Governance Token**
These are token specifically designed to give holders some voting right and privileges of making decisions in an ecosystem. This make the whole process decentralized.
|**Bottom Line**|
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Altcoins are profitable venture if only you can research the good ones as there are thousands of them out there calling for your attention. The good thing is that we have an alternative investment opportunity apart from bitcoin and Ethereum, moreso some of these project are solid with good use case. You could consider them in this next bull phase. There is no crime in looking in that direction.
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There you go friends.I would love to wrap it up at this juncture. I want to believe you've gotten so much from this piece. As my usual custom is, I would always encourage that you DYOR to be sure of every financial step you would want to take as I won't be liable for any form of loss encountered by you.
Feel free to share with me your thoughts in the comment section. Thanks for your time once again. Gracias!
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**Disclaimer: This post is made as an education and not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your own research and consult a financial advisor.**
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Regards
@lhorgic♥️
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