The digital revolution is upon us. Today, we spend most of our time online; whether it’s social interaction, running a business, or honing our skills with an online course, our lives are getting literally virtual.
Then comes money. It has been a while since fiat currency is the primary currency of the global financial system and it is expected to stay that way for the foreseeable future.
But like everything else, our currencies have gone digital as well. This is where cryptocurrencies have come to the limelight and their popularity is skyrocketing. Hundreds of companies are rushing to adopt cryptocurrencies as a form of payment and investors are pouring money like never before.
Carl Runefelt is a notable example, who turned multi-millionaire with his investments in cryptocurrencies. While speaking on his YouTube channel, “The Moon” he says, “Cryptocurrency is recognized across the world and is not affected by exchange or interest rates. It would also provide individuals living in economically fragile nations more stability and predictability. To do transactions, I can send the exact amount within seconds or minutes.”
A Star is Born – Bitcoin
It all began when the world was introduced to the first digital currency, Bitcoin. The purpose was pretty straightforward; to make a currency that is accessible to everyone, everywhere that is completely decentralized – doesn’t have to keep up with powerful intermediaries – and get the control back of your finances.
The innovation proved to be a hit. It took off slowly but its popularity and embrace gradually picked up the pace. Today, Bitcoin is the most sought-after cryptocurrency and has a market cap of over $400 billion – jaw-dropping, right?!
Carl Runefelt comments, “The only form of money that has every single thing that checks all the boxes is Bitcoin. Especially, since the volatility of Bitcoin is very high today. This will go down in the future as the liquidity goes up. If you look at the past 13 years of Bitcoin, the volatility has dramatically decreased every single year as more and more people are using it.”
Supporting Cast – Altcoins!
But Bitcoin is not the only cryptocurrency out there making its mark – over 11,000 cryptocurrencies are circulating in the market (all these other currencies other than Bitcoin are called Altcoins).
Maybe it isn’t fair to downplay Altoins’ worth by calling them a ‘supporting cast’ because there are numerous Altcoins that are offering more innovations and unique qualities as compared to Bitcoin. For instance, Ethereum.
Carl commented in one of his interviews, “I would also say that, of course, you can diversify into other coins as well. Personally, I have bought a bunch of other coins that I hold in my portfolio, and I think some diversification is fine, but in the bear market and even in the bull market, I always think that you should have the vast majority of your crypto portfolio.”
While Bitcoin dominates with almost %37 of the total crypto market share, Altcoins have a market cap of around $700 billion – gauge the significance of Altcoins with their market worth!
How Are Altcoins Different From Bitcoin?
Although Bitcoin and Altcoins both are digital currencies with the fundamental purpose of making financial transactions and acting as a store of value, there are few prime distinctions between the two.
Let’s have a look at their similarities and differences below.
- Both of them are volatile
- Bitcoin and Altcoins both are peer-to-peer systems that can be used to make purchases
- You would need a digital wallet to buy Bitcoin and Altcoins
- Both of them are decentralized by nature
- The value of Bitcoin is considerably higher than Altcoins
- Bitcoin is the first digital currency that has been around for much longer than Altcoins
- Bitcoin is fundamentally a store of value whereas numerous Altcoins offer innovations and unique capabilities
Major Leads in Altcoins
Altcoins hold a sizeable share of the global crypto market but few of them stand at the top. Ethereum is by far the biggest Altcoin that is not just a medium of payment but also renders a unique set of functions and capabilities like smart contracts and proof of stake.
Ethereum is the second-largest cryptocurrency that accounts for about a 20% share of the total crypto market. And it is catching up to Bitcoin bit by bit every year.
Cardano is the third largest digital currency which has an $84 billion market value. Carl predicts, “The community around Cardano is building, and there will come a time when it will have smart contracts.”