While Bitcoins are much touted and known to be a popular cryptocurrency. In general, altcoins are the entire crypto variations except for the bitcoin. Therefore, by Ekrona, we can referto all the cryptos except the first of its kind – bitcoin.
This was the old definition of altcoins or alternative coins. Now, we have more cryptos added to the exception list. Ethereum is now also out of the altcoin list. Ethereum, now having the largest blockchain platform along with the biggest community, is no longer an altcoin. It means you cannot take Ethereum as the altcoins.
Purpose of altcoins
Bitcoin is the largest cryptocurrency ever. However, from its initial days, it is constantly suffering from volatility. Therefore, to fix the problems, altcoins were invented to be in circulation. It was to support the volatile factor of the crypto market. Therefore, there are multiple types of altcoins invented, and right now, there are around eighteen thousandtypes of cryptos circulating in the entire market.
There many types of altcoins, and those are:
Utility tokens
Utility tokens are those that are connected with some particular purpose. Under the company’s products and usages, we can use the utility token only for that company’s product or services.
Memecoins
In short, meme coins are coins thatwere primarily based on memes. People were not really serious about the meme coins until some really important people started talking about it. The price of bitcoin started rising when Elon Musk drew people’s attention to the potential of meme coins. Among all the meme coins, he noted dogecoin as of the long runners. In fact, he invested in dogecoin as well. Dogecoin was created with a meme of the Japanese dog Shiba Inu. It was a meme that circulated all around the world.
Security tokens
When it comes to the security tokens, one can easily expect some security of it. Well, it is not like other cryptocurrencies. from the name, you can be sure that these are connected with the assets that most people save as assets. For example, one can buy some security tokens in exchange for gold, stocks, bonds, etc. These are the traditional security assets. So, security tokens have no real connection with fiat money. As they are connected with such assets, they also bring some stability to the market.
Stablecoins
Yes! As bitcoins are extremely volatile and cannot be trusted with their value, stablecoins came to the rescue. It is more reliable because of the fact that every stable coin is pegged with one of the fiat currencies. They do not fluctuate as much as the bitcoins. So, you can put your money in stablecoins with a little bit of ease and relaxation.
There are various fiat currencies with which the stablecoins are connected. For example, most the cryptos
Are connected with the united states dollar. Apart from that, there are the Euro, Japanese yen, Chinese yuan, pound, etc.
As per the theory, stablecoin is always connected with some fiat currency. In most cases, the stablecoins are pegged in one is to one ratio. For example, Tether is connected with US dollars with a 1:1 ratio. So, when the price of the dollar increases, the price of Tether will increase in the same ratio as well. The sameholds true for stablecoins as well. Their price will also increase or decrease as the price of the fiat currency (with which it is pegged) shifts.
Governance tokens
Governance tokens are created to help the developers to make shape future regulations. Who has the governance tokens will be deciding its future of it. They will even be proposing and deciding many factors.
Conclusion!
The above discussion would have given you a better insight into alltcoins and its application. Here are the important classifications of altcoin which will help you in deciding whether you want to go forward with it or not. In fact, even if you do want to proceed with altcoins, which segment will be your choice? Well, to know more about it and see the prices, Here you can register yourself and start trading in cryptocurrencies. The platform will simplify the registration process for you and will ease trading.
