We all are aware of Bitcoin and its rising popularity across the globe. Apart from Bitcoin, there are many other virtual coins that are in circulation. All these coins put together are known as altcoins. In other words, altcoins — a combination of two words, “alt” and “coin” — are cryptocurrencies other than Bitcoin. The basic framework for altcoins and Bitcoins is similar. Having said that, there are several things that differentiate the two from each other as well. Altcoins were built after the success of Bitcoin. But the rules were slightly changed for altcoins so that they appeal to some specific users. Today, altcoins provide better transaction speeds and energy efficiency.
There are many different types of altcoins available, based on their purpose. So, what are the pros and cons of investing in altcoins? Let’s find out.
Pros Of Investing In Altcoins
1) Plenty Of Choices: There are many altcoins in circulation in the market. That makes it easier for an investor to take a pick, based on returns, acceptability and other competitive advantages.
2) Better Version Than Bitcoin? It wouldn’t be wrong to say that altcoins are better and improved versions of Bitcoin in many ways. In terms of technology, they are more advanced, as they came after Bitcoin. Even in terms of transaction speeds, many altcoins are superior to Bitcoin.
3) Stability: For altcoins, the price fluctuations are generally low, unlike Bitcoins. This would be a great benefit for the investor since it is more stable, unlike the volatility associated with Bitcoins.
Cons Of Investing In Altcoins
1) Lack of acceptance: Many people are still not aware fully of altcoins. Thus, there is not much acceptance of the same in the market. And it is difficult to build that soon since now Bitcoin has become so popular.
2) Risks: There are a few risks involved while dealing with altcoins. They could be prone to scams or other failures.
3) Market Value: Many investors were not aware of altcoins until recently. Of course, Bitcoin is more popular and has a high market value as compared to altcoins. Investors wouldn’t want to invest in something that provides them with lower returns.
However, ultimately the decision to invest rests on the individual investor. So, consider all the parameters before making a choice.