There are a ton of alt crypto coins. These days, any techie can whip up a whitepaper and an alt coin.
Alt coins come in a staggering variety. How does one sift through the wide variety of coins to find the hidden gem?
This is no easy feat! However, this guide should help to get you started!
How To Buy Altcoins
Buying many altcoins requires buying Bitcoin first. Then, trade your Bitcoin for the desired altcoin on an exchange.
You don’t need to buy cryptos directly from other owners or OTC. Exchanges are safer than direct purchases.
Beginners should use exchanges to protect themselves from scams.
We strongly recommend you get a coin portfolio tracker to keep track of your coins.
Research And Find The Best Altcoin For You
There are many factors to consider before purchasing an altcoin. You should choose a coin based on your needs.
Look into the reputation of the altcoin and what it offers. Read up on the altcoin and see if it appeals to you.
Pick a coin that fits your needs.
Fiat Money To Digital Money Or Buy BTC
Most cryptocurrencies can’t be bought with dollars. You need to buy Bitcoin first, then trade it for your altcoin on the right platform.
A bitcoin wallet is needed to store your coins. Your altcoin wallet should be kept separately from your bitcoin wallet.
Choose An Exchange
After buying Bitcoin, you’ll need to search for an exchange that offers your altcoin.
CoinMarket hosts a list of the most popular currency exchanges, the markets or currency pairs these exchanges deal in, hourly trades, and daily volume.
Unless you’re a crypto-trading ninja, avoid the less popular exchanges. Popular exchanges are more liquid.
Only advanced traders and experienced traders should stray from them.
Liquidity means you’ll be able to buy altcoins faster and closer to the market price.
You’ll also want to learn about the different types of exchanges available.
Exchange rates are very important when using foreign currency. You should be wary about exchanges that charge high exchange fees or low rates.
Find The Currency Pair
You should consider buying Bitcoin when it is cheap. This means that you should buy Bitcoin when it trades for less than $1,000 per coin.
When Bitcoin is expensive, you shouldn’t buy any because it will cost more money to purchase Bitcoin.
Trade BTC For Your Chosen Altcoin
When you’re ready to make the trade you’ll go to the exchanges and place an order for altcoins.
You should also know how to examine the market, forecast the price, and create an order.
Move The Altcoins Into A Wallet
After the purchase is completed, your precious altcoins will be moved off the exchange and into your wallet.
Hardware wallets are the safest type of wallet because they are offline and disconnected from the internet.
What Are Altcoins?
Cryptocurrencies were created in 2009. Since then, there have been many types of cryptocurrencies.
Some of them are used as means of payment. Others are used to secure transactions.
Altcoins are alternative cryptocurrency projects that are different from bitcoin.
They are used by people who want to use blockchain technology but do not want to use bitcoin.
Bitcoin is an innovative financial system that allows people to send money directly without going through banks or clearing houses.
Digital currencies are created to make fast and reliable transactions possible.
Many of them were created by modifying the original Bitcoin code.
Others were written from scratch. Some of them are used to transfer money online. Others are used to send payments anonymously.
Tokens are used by platforms to give users certain rights, such as access.
Utility tokens are usually issued on a specific blockchain, and are distributed via initial coin offerings.
These tokens are used to crowdfund projects.
The crypto markets are extremely volatile. The value of one token can change dramatically within minutes.
If you don’t understand this concept, you could lose all your investments.
There are two ways to invest in crypto:
- Short term (days)
- Long term (weeks/months)
Short Term Investing
If you plan on investing for just days, you should open a short position. A short position lets you profit if the price drops.
To open a short position, you borrow shares of the asset from someone else.
You then sell those shares at a lower price, hoping that the price will continue to drop.
Once the price has dropped enough, you buy back the shares at the higher price. This cycle continues until you no longer own the asset.
Long Term Investing
If you plan on holding your investment for weeks or months, you should open a long position.
A long position gives you exposure to the price movement. It is similar to owning stock in a company.
When the price goes down, you make money. When it goes up, you lose money.
However, unlike stocks, you can choose which assets to invest in.
ICOs are an investment vehicle that allows people to invest in startups. Investors get tokens as compensation for participating in the ICO.
These tokens may be used to vote on important decisions or to stake them for bonuses.
Popular examples of utility tokens are BAT, GNT, REP, SRC, and TKN.
Many security token offerings were canceled because of regulatory constraints. Nonetheless, they are gaining increasing popularity.
Security tokens are used by investors to invest in companies. Investors like them because of their benefits.
Projects use security tokens to raise money from investors. Security tokens are different from tokenized securities.
Some Examples Of Altcoins
Litecoin (LTC) is a cryptocurrency based on Bitcoin Core but uses scrypt instead of SHA256d.
It was created by Charlie Lee who formerly worked at Google. It is considered to be more secure than bitcoin due to its use of scrypt.
Ethereum is a ledger technology used to build DApps. It is similar to Litecoin but has a larger supply and a faster block processing speed.
Ethereum is backed by the Chinese Government, uses a special proof of stake system, and uses a special token (Ether).
Ripple is an open source software company that develops products related to financial technology.
Ripple is most well-known for its blockchain based protocol called xCurrent.
This protocol allows banks to send and receive payments across borders without using third party intermediaries.
Ripple also offers other services such as real time gross settlement (RTGS) and remittance corridors.
Altcoins might be confusing, but hopefully this guide has helped you to learn a little about them!