Altcoins are very different from Bitcoin – they are all other cryptocurrencies outside of Bitcoin. Short for alternative coins – basically all crypto coins on the market, which were over 18,000 in March 2022. At the top of the food chain are Bitcoin and Ethereum, worth 20,956 respectively, $6 and $1072.15, at the time of writing. Ethereum is one of the most promising altcoins, especially now that it is tied to NFTs and the metaverse. Still, it is the other 17,999 altcoins that need to grow in popularity to become a viable consideration for a payment option. Let’s see how this could happen.
The Evolution of Altcoins
The first altcoin entered the market two years after Bitcoin in 2011, called Litecoin. It turns out that Litecoin was to be the first of several thousand altcoins to flood the market, all with different purposes but all with a similar makeup to Bitcoin. They both share the same source code and run on the same peer-to-peer systems, like Coinbase. In some cases, altcoins have attempted to become the next bitcoin by providing a cheaper and more viable method of e-commerce.
One of the glaring differences between altcoins and bitcoin is in the uses and applications. Altcoins are designed to have multiple functions. Some coins are used only for mining, some are used as stablecoins, some are used as security tokens, and some are nothing more than meme coins. But Bitcoin has the sole function of being a way for people to send money over the internet using a decentralized blockchain.
Why Bitcoin is already a payment option
Bitcoin is already a payment option because it was created to be exactly that.
Alternative payment methods have become increasingly popular in recent years. The migration from physical transactions to online transactions was inevitable. The use of prepaid digital cards and online digital wallets at online casinos like dunder, local vinyl vendors and major high street retailers such as Zara are now common and widespread. The use of digital solutions in physical stores also continues to rise.
Yet it took many years for Bitcoin to actually become a real-world payment option, so to speak, with brands like Lush, Etsy and dunder allowing buyers or players to spend using Bitcoin. How did Bitcoin get here? By confidence and evolution. Bitcoin’s value is relatively stable against the dollar compared to many altcoins, and it comes with cheaper transaction fees that appeal to sellers and vendors.
People now believe that Bitcoin is stable enough to be a viable payment option, with fluctuations in value always low and the ability to exchange Bitcoin for dollars easy.
What should altcoins do to catch up?
Altcoins have a lot to do to catch up in the sense that the value is not as reliable, and some altcoins are generally not suitable to be a viable payment method for sellers to accept. For example, the Dogecoin meme coin, although it is now gaining in value, is still considered a coin with no real value and has little value in the crypto world. The value of altcoins varies widely, making it riskier for sellers to accept it as a payment option because within the time frame of a transaction, an altcoin could lose half of its value.
The only coin making progress in the real world is Ethereum, although its progress is now more noticeable in the digital world with NFTs and the metaverse. Right now, altcoins have more uses for trading and investing than a real-world payment option.
Altcoins are intriguing. They have multiple uses and functions that attract investors, and there is no denying that the use of altcoins is growing as more and more investors dive into the world of altcoin investing. But it’s also undeniable that most altcoins are unlikely to become an accepted form of payment any time soon.