I mentioned earlier that we would be looking at the topic of altcoins in more detail, well, that day has come.
First, let's refresh our memory of what this is:
Altcoins are alternative coins (tokens) to Bitcoin.
That's it. End of article. You can close it.
Still here? Great, so you're willing to spend time learning. Which means you might stick around longer)
So, let's go, let's start with a small detail that I touched on at the very beginning...
Coins and Tokens
That's right, both are considered altcoins, but there is still a difference.
A coin is a cryptocurrency that operates on its own blockchain. For example $ETH . Or $TON . Or $FLUX ... Or many other things, we won't stay here for long.
Tokens - cryptocurrency that uses existing blockchains. Like DOGS or HMSTR for TON. LINC/UNI for ETH. Or even terner... (Although it has been around for a long time)
And so we mentioned the basis (now at least they wonât laugh at usđ), letâs move on.
Altcoins are divided into sectors, usually based on their application (or lack thereof).
Let's begin:
DeFi (Decentralized Finance):
Projects aimed at creating financial services such as lending, staking, decentralized exchanges, etc.
Examples: Aave, Uniswap.
Games and the Metaverse (GameFi and Metaverse):
Includes gaming projects and platforms for creating virtual worlds, with support for non-fungible tokens (NFT). Examples: Axie Infinity, Decentraland, The Sandbox.
NFT (Non-Fungible Tokens):
Tokens that represent unique digital assets such as art, collectibles, and virtual real estate.
Examples: Enjin Coin, Chiliz, Rarible.
Web 3.0:
Protocols and platforms aimed at decentralizing the internet, improving privacy, and integrating blockchain technologies.
Examples: Polkadot, Filecoin, Chainlink.
Smart contracts:
Platforms that provide infrastructure for creating decentralized applications and smart contracts. Examples: Ethereum, Solana, Cardano.
Infrastructure tokens:
Tokens that support core blockchain systems and their functioning, such as scaling and improving network performance.
Examples: Polygon (MATIC), Cosmos (ATOM).
Private coins:
Cryptocurrencies with increased privacy and anonymity of transactions.
Examples: Monero, Zcash, Dash.
Stablecoins, I contradict myself here, but yes, as it turns out, stablecoins are also altcoins: These are cryptocurrencies pegged to traditional assets, such as the US dollar or gold, to reduce volatility.
Examples: USDT, USDC, DAI.
Shitcoins:
These are cryptocurrencies with little or no real-world value/use, often created without long-term goals. Their price can be extremely volatile, and they are often used for short-term speculation.
Memecoins:
Cryptocurrencies that are based on internet memes or jokes usually have no serious technology behind them. Despite this, some memecoins can become very popular due to public interest. Examples: Dogecoin, Shiba Inu.
Fan tokens:
Tokens issued by sports teams or other popular brands to create interaction with fans. They often give holders the opportunity to participate in voting or receive unique privileges.
Examples: Chiliz, PSG Fan Token, Juventus Fan Token.
Seed (early stage investment projects):
Tokens that are sold in the early stages of a project to raise funds. Investors buy them with the hope that the price will increase in the future as the project grows and becomes successful. These tokens can be extremely risky, as many startups fail to achieve success.
Artificial Intelligence Currencies (AI tokens):
Tokens associated with AI and machine learning projects. They are used to build decentralized AI models, provide computing power, or access to data. Examples: SingularityNET (AGIX), Fetch.ai (FET).
Layer 2 solutions:
Tokens associated with blockchain scaling solutions that ease the load on the main network (Layer 1). This helps increase transaction speeds and reduce fees.
Examples: Optimism (OP), Arbitrum.
Governance tokens:
These tokens give their owners a say in the governance of decentralized projects or protocols. Owners can make decisions on improving the network, changing rules, or distributing resources. Examples: Uniswap (UNI), Compound (COMP).
Exchange tokens:
Issued by crypto exchanges that provide benefits to users of these platforms, such as discounts on fees or participation in IEO (Initial Exchange Offering). Examples: Binance Coin (BNB), FTX Token (FTT), OKB.
Security tokens:
Tokens that are a digital form of shares or bonds and are regulated as financial assets. They give holders rights to earnings or voting rights, just like traditional shares. Example: Securitize.
And that's not all, there are many more sections worth mentioning, but I've already outlined everything here...
Knowing the sector your coin/token is from is the very first step before buying. At least know what you are buying, not to mention why...
Clarification: The information presented here does not claim to be reliable, always check the information received yourself (and do not hesitate to ask questions or correct the author if this is really necessary).
Clarification 2: This article was created with the help of AI and/or based on information provided by AI, which increases the risk of unreliability. If you have already checked the information, then check it again, and if not, now is the time to do so...
