Bitcoin is the oldest cryptocurrency in the world and has the largest market capitalization. Most of us know Bitcoin and its features. After the release of Bitcoin, different types of altcoins were released in the cryptocurrency world. While many people believe that both are the same, the experts say that Bitcoins and Altcoins have many differences.
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Difference between Bitcoin vs. Altcoins
1. Difference between Bitcoin vs. Altcoins
Bitcoin is the oldest cryptocurrency in the world and has the largest market
capitalization. Most of us know Bitcoin and its features. After the release of
Bitcoin, different types of altcoins were released in the cryptocurrency world.
While many people believe that both are the same, the experts say that Bitcoins
and Altcoins have many differences.
This guide will show the major differences between Bitcoin and Altcoins. We will
further discuss the meaning of both these cryptocurrencies with features and
characteristics.
What is Bitcoin?
Bitcoin was the first cryptocurrency developed in the year 2009 by Satoshi
Nakamoto. It was originally in the form of digital cash that acts like a ledger.
Bitcoin records all the transactions on the decentralized networks. Every
transaction that takes place with Bitcoin can be verified. Bitcoin network uses
encryption that allows users all over the globe to transact in Bitcoin.
It is a type of decentralized network and no one controls it. Because of the scarcity
of Bitcoin, the value increases with time. The market capitalization of Bitcoin is
$403 billion according to the survey of 2022. Around 10.1 million BTC are still in
circulation.
What is Altcoin?
Altcoin is any kind of cryptocurrency not including Bitcoin. Many types of altcoins
were released after the release of Bitcoin. Altcoins will solve many issues such as
transaction speed and security factors. They will facilitate other functions on a
blockchain.
Litecoin was the first altcoin made from the fork of the Bitcoin blockchain. During
the year 2011, there were not many Bitcoin competitors. The term altcoin was used
for all the cryptocurrencies released after Bitcoin.
Some of the most popular altcoins in the market include Ethereum, Binance Coins
(BNB), and XRP.
2. BTC vs Altcoins: Key Differences
After discussing both the terms, we will now look at the major differences between
Bitcoin and Altcoins.
1. Market Dominance
In terms of market dominance, Bitcoin holds the top position in the market. It has
the largest market share in all the crypto assets. Bitcoin was the first
cryptocurrency released in the year 2009 and has managed to stay at the top even
after years in the crypto market. It is the widely accepted crypto in the globe with
the largest market capitalization.
Altcoins include many types of cryptocurrencies and represent several projects and
technologies. They were released after the release of Bitcoin.
2. Technology and Functionality
Now, we will look at the difference between the two cryptos in terms of
technology. Bitcoin is a kind of decentralized platform and it mainly secures top
transactions. On the other hand, Altcoins include many new technologies and
functionalities beyond simple transactions. Ethereum helps to create smart
contracts with certain conditions.
3. Price Volatility
In terms of price volatility, both Bitcoin and Altcoins go parallel to each other.
Both get high price volatility. However, Bitcoin is less volatile because of its large
market capitalization and high adoption. On the other hand, Altcoins have higher
price swings than Bitcoins. You may gain higher profit opportunities in Altcoins
than Bitcoin along with certain risks as well.
Bitcoin vs Altcoins: Key Features and Characteristics
We will further discuss the features of Bitcoin and Altcoins in this section.
Bitcoin Features
1. Hard cap of Bitcoins
3. Bitcoin can be a maximum of 21 million in number. The hard cap is built within
the core of Bitcoin’s code. This hard cap can be changed only with the help of
unanimous consensus by a decentralized body of custodians elected in the service.
Bitcoin has a fixed supply and acts as an incentive to validate the network.
2. Valuable asset
Bitcoin has been a mainstream asset for many years. According to the latest
survey, there are more than 100 million BTC users all around the globe. Bitcoin’s
widespread popularity makes it the most valuable crypto in the globe. Apart from
that, the high number of users also adds to the value of Bitcoin. It is widely
accepted by the users and includes heavy liquidity as well.
3. Decentralized platform
Bitcoin is a decentralized platform as it cannot be validated without unanimous
consensus in all the nodes. A node is a computer connected to the network of other
computers communicating with each other via internet. Decentralization is a
balance system before blocks are added to the chain. It is a unique feature of
Bitcoin.
4. Scarcity
Bitcoin has a supply of 21 million coins right now. It is a scarce cryptocurrency
which makes it a valuable cryptocurrency around the globe.
5. Security of the coin
Mining is a process that regulates the blockchain of Bitcoin. This process includes
powerful computers that solve complex mathematical problems to validate every
transaction.
Altcoin Features
1. Innovative technologies
Altcoins are all other kinds of cryptocurrencies except Bitcoin. They bring new
technologies and features that one will not find in Bitcoin. These new technologies
and features will lead to more advancement in the crypto space. They will make
the mining process of cryptocurrencies easier than before.
4. 2. Multiple functions
Altcoins can be used for the various purposes. They will help to improve Bitcoin’s
technology and enhance the working of other industries such as finance,
healthcare, and gaming. The different types of altcoins can be used for various
purposes in the crypto world.
3. Helps to boost growth
Many altcoins can appreciate the price if their projects become popular and are
widely adopted by people around the world. Certain altcoins have a massive price
increase which give higher returns to the investors than other cryptos.
4. Diversified portfolio
Altcoins help you to diversify crypto portfolio beyond Bitcoin and Ethereum.
Final words
These are the major differences between Bitcoin and Altcoins. Both have their
own benefits and drawbacks. You can talk to a financial expert before investing
money in any cryptocurrency. Experts will explain the various things related to
cryptocurrency such as price volatility, risk involved and so on. They help you to
take the right decision while choosing any option between Bitcoin and Altcoins.