Altcoin

Altcoin refers to any brand of cryptocurrency that is not Bitcoin. It encompasses all of the hundreds of cryptocurrencies that were created to be either a rival of or alternative to Bitcoin. Though Bitcoin has only been around since 2009, it’s gained increasing popularity as investors see the value of trading in a technologically managed, decentralized market. But different brands of altcoin contribute to that market as well. Having more than one form of cryptocurrency helps further decentralize the system. Instead of being managed by a governing body, cryptocurrency platforms are run by many high-performing computers that complete complex mathematical functions.

Cryptocurrency systems use blockchains to record transactions between sellers and buyers. Blockchains connect blocks of stored data regarding a transaction, which have cryptographic hashes. The next block will include the previous block’s hash and its own. Thus the blocks are connected in a chain. Every time a transaction occurs, all the computers in that cryptocurrency system add the transaction to their record of transactions. Any illegitimate transaction will be rejected when it clashes with the entire system’s records.

As Bitcoin is by far the most established form of cryptocurrency, few alternatives compare. Many altcoin currencies fizzle out after a short period of time, but there are a few well-known, established platforms. Ethereum, Ripple, and Litecoin are some of the notable ones.

 

Jenna Phipps
Jenna Phipps
Jenna Phipps is a writer for Webopedia.com, Enterprise Storage Forum, and CIO Insight. She covers data storage systems and data management, information technology security, and enterprise software solutions.

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