What is altcoin?
At this point, everyone already knows what Bitcoin is. Even the people that have never owned a cryptocurrency, probably heard of Bitcoin. But the term ‘altcoins’ is still a little bit mysterious. Let us change that.
The other coins
Recently, we’ve talked a lot about Bitcoin and how to buy it. But today is a good time to move our focus somewhere else. Obviously, there are more cryptocurrencies than just Bitcoin. Do you know “what are alt coin”? This is a phrase which people use to find more information. But actually, the name of altcoins is written jointly. So what are altcoins?
The answer is really simple. Altcoins are all the virtual coins that were created after Bitcoin. This is basically a general name for all those cryptocurrencies: Ethereum, Litecoin, Monero, Dogecoin etc. There are thousands of altcoins out there, and only one Bitcoin. But why such a name? What does it mean? And how to choose altcoin from all of the available ones on the market? Do not worry, we have your back.
But first of all, we would like to talk a little more about the genesis of that name. Back in 2011 when Bitcoin was the only starting to be recognised, the need for an alternative appeared. And then Namecoin was created. It is considered the first ever altcoin but it’s no longer around. Then other coins started to pop up. There was Litecoin and Ripple and many more. The name for all of those wasn’t hard to come up with. Since it was an alternative to Bitcoin, the people took the “alt” and added it to “coin”. That’s how the term “altcoins” came to life.
Why were altcoins created? The answer is simple. The idea of Bitcoin was really great but it did have some drawbacks. It was heavy and slow. People wanted something lighter and faster. And they created the silver to Bitcoin’s gold. So what altcoin means? It is the substitute to the first cryptocurrency. And they are also the future of the whole digital assets market.
The relation between Bitcoin and altcoins
The next question is very important for traders. Namely: how are altcoins connected to Bitcoin? Should we sell altcoin when bitcoin is low? And buy altcoin when Bitcoin is high? To resolve this issue we all need to understand the relation between altcoins and Bitcoin. The main reason why there are any dependency at all are the exchanges and the trading markets. Basically, altcoins are usually paired with Bitcoin. The traders can exchange Bitcoin for almost any altcoin. That is why the prices are often related. When Bitcoin falls, many altcoins are bound to go down, too. But when Bitcoin goes up, there is a chance some other crypto will as well.
When to buy?
So to answer all of your questions, yes, you should take under consideration Bitcoin’s charts when you are thinking about buying an altcoin. But the statement that you should sell altcoin when bitcoin is low and buy altcoin when Bitcoin is high is an exaggeration. Mostly, you have to focus on the exchange rate of the coin that you are buying or selling to know when altcoin rise. Secondly, take a look at Bitcoin’s price, just to make sure. This way, trading should be easier for you and predicting the future prices should be easier, too.
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