Bitcoin Versus Altcoins: Which One Should You Buy In 2020
The crypto industry is full of many digital coins. Again, the number of virtual coins is increasing every day. Choosing the right digital coin might seem difficult but it’s not about right or wrong coins, it all depends on the right knowledge and your goals.
Investing in cryptocurrencies does not mean that you choose any coin randomly and start investing. First, you need to learn about different digital coins and choose a coin based on the area application and your financial goals. If you are not sure whether to invest in bitcoin or to go for alternative coins, read on.
Before, reviewing bitcoin and altcoins let us understand why are so many digital coins in the crypto market?
Why So Many Cryptocurrencies?.
Bitcoin is the first and most successful cryptocurrency. Nobody ever thought that the value of bitcoin would rise to this level. Again, the underlying technology blockchain can be recreated easily. As blockchain does not require any third party for authorizing financial transactions it gives freedom to the users.
Due to these reasons, bitcoin enthusiasts wanted to create their digital coins using blockchain. Today, more than 5000 digital coins are available and the number is still growing. Explore more information about different popular cryptocurrencies by logging into the Profit System App.
Bitcoin vs. Altcoin
As bitcoin is the first digital coin, it is acknowledged as the original cryptocurrency. All other cryptocurrencies are considered as alternative coins or simply altcoins. First, let us look at bitcoin, its advantages, disadvantages, and applications.
When bitcoin released in 2009, there were no cryptocurrencies. It was the first of its kind and the underlying technology blockchain was also introduced at that time. Gradually, the value of bitcoin grew from $0.0008 to $10000 today. In 2017, its value touched to the highest mark nearly $17000.
Bitcoin has remained at the top position since its inception in terms of the total market cap. Bitcoins are created by a process called mining, which means computational problems need to be solved for creating new bitcoins. Miners get rewards in bitcoin and they also validate the transaction in the decentralized network.
Bitcoin has widely accepted in many countries and the most trusted cryptocurrency. Because it has the highest number of dedicated miners who are maintaining the distributed ledger and ensuring security. Again, bitcoin is the most popular digital asset among investors and traders. It is also used as a value system and accepted as a medium of payment.
No doubt, bitcoin has a plethora of advantages as the most popular and trusted crypto coin. However, there are some disadvantages. One of the drawbacks of bitcoin is transaction fees. Miners have the option to choose the transactions to process with higher fees.
Another drawback is some people complain that the anonymity feature of bitcoin can be traced after a few transactions. Many also pointed out that the mining process of bitcoin requires a lot of energy consumption which can be reduced with a more efficient system.
Crypto coins other than bitcoin are referred to as altcoins. There are thousands of altcoins are available and more coins are under development. Some of the best alternative coins are Ethereum, Litecoin, XRP, etc. Every crypto coin is meant to serve a purpose and it varies from one coin to the other. However, many crypto coins are not reliable, so avoid such altcoins.
One of the great advantages of altcoins is that they are alternatives to Bitcoin. So these coins can be used when anything wrong goes with bitcoin. Again each altcoin serves different purposes to various industries.
The main problem with altcoins is limited acceptance and exposure. Only a few altcoins such as Etherum, Litecoin, Ripple, have good exposure and support. Again, some altcoins are not reliable due to a lack of security and authenticity.
Now, what do you think, to buy bitcoin or altcoins? In my opinion, the best way to invest in a crypto is to diversify your investment portfolio with some bitcoins and also invest in a few reliable altcoins. To identify the reliable alternative coins, you can conduct your research or read my other articles on the best alternative cryptocurrencies. If you have any queries feel free to ask me and please share your views on this post.