Get To Know Altcoins: Definition, Mechanism, And Famous Altcoins

Altcoin, short for alternative coin, is the term used to refer to cryptocurrencies other than Bitcoin. (photo: doc. pixabay)

JAKARTA - Cryptocurrencies have become a global phenomenon in recent years, and besides Bitcoin which is known as the first digital currency, there are also many other types of cryptocurrencies known as altcoins. What exactly is altcoin? How does it work? And what are the famous altcoins and their valuations? Let's take a closer look.

Definition of Altcoins

Altcoin, short for alternative coin, is the term used to refer to cryptocurrencies other than Bitcoin. Altcoins emerged after Bitcoin as an attempt to present different variations or alternatives in the world of cryptocurrencies.

Most altcoins are built on the same blockchain technology as Bitcoin, but they differ in terms of features, purpose, and technology used.

How Altcoins Work

The basic principle of how altcoins work is similar to Bitcoin. Altcoins use blockchain technology to record transactions and verify them over a decentralized network. However, each altcoin has its own characteristics and mechanisms for carrying out its operations.

For example, some altcoins use different consensus algorithms such as Proof of Stake (PoS) or Delegated Proof of Stake (DPoS), which are different from the Proof of Work (PoW) used by Bitcoin.

In addition, altcoins can also be used for various purposes and functions. Some altcoins are designed to focus on privacy and anonymity, such as Monero (XMR) which offers untraceable transactions.

There are also altcoins that focus on developing blockchain technology, such as Ethereum (ETH) which has the ability to run decentralized applications known as smart contracts.

Famous Altcoins and Their Valuations

There are many altcoins that are well-known and widely used in the cryptocurrency market. Some of them are:

1. Ethereum (ETH)

Ethereum is known as a blockchain platform that enables the development of decentralized applications and smart contracts. Ethereum's current valuation is around 350 billion (IDR 5,154 trillion) (as of April 13).

2. Binance Coin (BNB)

BNB is the token used in the ecosystem of Binance, one of the largest cryptocurrency exchanges in the world. BNB is also used to pay transaction fees within the Binance ecosystem and has a valuation of around US$80 billion (IDR 1,178 trillion).

3. Cardano (ADA)

Cardano is a blockchain platform developed by the technology company IOHK. Cardano uses the PoS algorithm and is known for its scientific approach to development. Cardano's current valuation is around 60 billion. (IDR 883.5 trillion).

4. Solana (SOL)

Solana is a blockchain platform that has very high transaction speeds and low transaction fees. Solana has started to gain popularity in recent years and has a valuation of around USD 60 billion (IDR 883.5 trillion).

5. Dogecoin (DOGE)

Dogecoin was originally a parody of cryptocurrency but later became popular and used by the crypto community with a significant market cap value. Dogecoin is an altcoin based on internet memes and has a current valuation of around 45 billion US dollars (IDR 662.6 trillion).

It is important to remember that the cryptocurrency market is very volatile and altcoin valuations can change drastically in a short period of time. Market value can be affected by many factors, including market demand, user adoption, and market sentiment.

Altcoins are cryptocurrencies other than Bitcoin that offer variations and alternatives in the world of cryptocurrencies. They use the same blockchain technology as Bitcoin but with different features, purposes, and technologies. Several well-known altcoins such as Ethereum, Binance Coin, Cardano, Solana, and Dogecoin have significant market valuations.

As with investing in any asset, investing in altcoins comes with risks that need to be considered. The market value of cryptocurrencies can fluctuate significantly and there is no guaranteed profit. It is important to conduct careful research, understand the risks and consider personal finance policies before investing in altcoins or other cryptocurrencies.

The best advice is always to consult a financial professional or cryptocurrency expert before making any investment decisions. Also be familiar with the regulations and laws regarding cryptocurrencies in your area, as regulations may vary from country to country.