What Sets New Cryptocurrencies Apart from Established Ones

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Cryptocurrencies and blockchain technology are more mainstream than ever and are helping shape the way we interact with spendable funds and perceive the financial world around us. 

When many people reference cryptocurrencies/digital currencies, the one that often springs to mind is Bitcoin (BTC). Others may think of Ethereum. 

You may be surprised to learn there are now close to 9,000 'active' cryptocurrencies, each with a certain real-world value, and around 4,000 more 'dead' cryptos with basically zero value or utility. 

New cryptos, or basically any cryptos apart from Bitcoin, are often referred to as 'Altcoins' (alternative crypto coins). Here is a closer look at what distinguishes new cryptocurrencies/altcoins from established ones like BTC and ETH. 

What exactly is cryptocurrency?

Cryptocurrency is essentially a digital currency (aka virtual currency) that uses encrypted and decentralised blockchain networks to facilitate transactions. The technology also controls the creation of new units. 

Cryptocurrencies and blockchain technology are revolutionising the financial world.

Blockchain technology keeps a secure and transparent record of all transactions, which are verified by multiple participants on the network and operate on a peer-to-peer network. 

The high levels of encryption and decentralised nature of cryptocurrencies mean there is no need for centralised governments or intermediaries to monitor or interact with blockchain/crypto transactions, which essentially safeguards the essence of online freedom. 

With cryptocurrency, it is virtually impossible for anyone to counterfeit or forge new digital currency units or tamper with transactional history.  

Bitcoin was the world's first true cryptocurrency, which has also inspired the creation of many other new crypto coins, known as altcoins, which are created to address specific challenges by offering additional features and case uses. 

What sets new cryptocurrencies apart from Bitcoin?

As mentioned, altcoin is a term used to describe a range of 'newly formed' cryptos or basically any digital coin that isn't Bitcoin. 

Each altcoin (aka crypto coin, digital coin or cryptocurrency) boasts its own specific use cases/utilities and characteristics to set itself apart from other altcoins. 

For example, Ethereum (ETH), which is also classed as an altcoin but is highly evolved and well-established like BTC, focuses on decentralised applications (dApps) and enabling smart contracts. 

In contrast, other Altcoins like Ripple (XRP) focus more on reshaping and improving the efficiency of cross-border payments. 

In other words, the fundamental technology and features each altcoin utilises are the main components that set well-established cryptos like Bitcoin and Ethereum apart from all other altcoins. 

Bitcoin relies on a proof-of-work consensus algorithm, whereas emerging altcoins use various other consensus mechanisms to improve energy efficiency and scalability, such as delegate proof-of-stake or proof-of-stake. 

Furthermore, altcoins aim to bring about improvements or innovative new features to address the limitations or flaws currently posed by Bitcoin. 

One such example is how Litecoin (LTC) was developed as a 'lite' version of BTC, utilising a different hashing algorithm for improved transaction confirmation times. 

Are there any exciting new cryptocurrencies/altcoins with the potential for success?

Based on their performance so far, some of the most promising altcoins potentially worth investing in today, many of which have shown great potential in presale projects, are the following:

• Dogecoin20 ($DOGE20)
• Golden Inu (GOLDEN)
• Bitcoin Minetrix (BTCMTX)
• Sponge V2 (SPONGEV2)
• Hypeloot (HPLT)

Others include Slothana (SLOTH), Lingo (LINGO), eTukTuk (TUK), Insanity Bets (IBET), and Smog (SMOG), to name a few. Altcoins enhance user privacy, and many have emerged as privacy-centric alternatives to Bitcoin, utilising zero-knowledge proofs and advanced cryptography techniques. 

Final thoughts

Before investing in new altcoins, conducting a fair amount of due diligence and research is always best. Also, don't forget that any investment comes with an element of risk and is never guaranteed to return a profit. 

Developer activity and community support will continue to play a key role in emerging altcoins' success and further growth. However, it can take many years before new altcoins garner their own established communities and become more stable and fruitful for investors.