Stablecoin Vs Altcoin

#altcoin #stablecoin #cryprocurrency #bitcoin #ether #blockchain


“An altcoin has 1 of 2 definitions: it is either any cryptocurrency that is not Bitcoin, or any cryptocurrency that is neither Bitcoin nor Ethereum”— Paul Ebeling

Regardless of which definition you pick, this term refers in general to all of the “other” cryptocurrencies on the market.

A segment of altcoins is a specific type of cryptocurrency called a stablecoin. A stablecoin is a type of cryptocurrency with a set, defined value. While not as useful for investing, the fixed price of a stablecoin makes it useful for cryptocurrency transactions.

Here is how they compare

Altcoin means any cryptocurrency that is not Bitcoin. It can also mean any cryptocurrency that is not Bitcoin or Ethereum, although that usage is much less common.

Cryptocurrency is dominated by 1 asset. At time of writing, the cryptocurrency market was worth more than $2.6-T in overall value. Of this, Bitcoin alone was worth more than $1.2-T. Bitcoin has always dominated the total cryptocurrency market with Bitcoin generally being worth between 45% and 70% of all crypto value at any given time.

Bitcoin also dominates the conversation around cryptocurrency. It was the 1st cryptocurrency issued, and it introduced the concepts of both blockchain and crypto to the wider world. Crypto is so thoroughly dominated by Bitcoin that, for many people, the 2 ideas are interchangeable.

Altcoin: While the value and culture of cryptocurrency is dominated by Bitcoin, the 2nd-largest currency in the marketplace is Ethereum. At time of writing Ethereum was worth approximately 20% of the cryptocurrency market, and this is around where its value usually fluctuates. Ethereum is also an important example of a transactional cryptocurrency. This asset is built to execute contracts and help computers share resources across a decentralized network. Many, if not most, transactions in the cryptocurrency and blockchain community take place using Ethereum’s network, making it a backbone of this technology sector.

The dominance of Bitcoin led to altcoin, which refers to any other cryptocurrencies for sale and trade.

A stablecoin is a type of cryptocurrency where each coin’s value is fixed to an external asset. By definition, any stablecoin is also an altcoin. The value of a stablecoin can be pegged to any asset, although most stablecoins are defined by the USD or EUR.

Such backing sets a minimum price for an asset, since anyone who wants to sell their coins least can always sell them to you for $1. So, since you have guaranteed the minimum price-per-coin, there is no risk of inflation pushing the price below $1.

By definition any new cryptocurrency will be an altcoin. This is particularly important for investors seeking potentially explosive returns. The kind of gains that come from investing early in an undiscovered asset can only come from altcoins. This is opposed to Bitcoin and Ethereum. Although these assets are both highly volatile, they are as established as any cryptocurrency can get.

Have a prosperous day, Keep the Faith!

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