What Is Altcoin?

What Is Altcoin?

Given the popularity of cryptocurrency, there is a lot of talk about altcoins. Many people think that altcoin is a specific type of cryptocurrency. Instead, it was a name developed not long after the introduction of bitcoin to indicate digital currencies other than bitcoin. The term altcoin is a combination of the words “alt” and “coin.”

There are many altcoins to buy and the number of altcoins 2021 exceeded 12,000. Therefore, anyone considering altcoins to invest in should do thorough research. 

Unfortunately, along with legitimate altcoins, there are a large number of altcoin scams and altcoin frauds that rob traders of millions every year. Contrary to widespread belief, crypto recovery is possible even in tough cryptocurrency fraud cases.  

When it seems like a challenge to recover cryptocurrencies, MyChargeBack professionals meet this challenge with expertise and proven strategies for fund recovery. We have combined decades of experience dealing with forex scams, crypto scams, and other types of fraud and we can provide guidance that will help you win your case. 

How Altcoins Began

Bitcoin was introduced as the first and the main form of cryptocurrency in 2008. Not long after the introduction of bitcoin, there were many criticisms about shortcomings, including the amount of energy and time devoted to mining it and volatility in bitcoin price. 

Even with the development of thousands of altcoin varieties, the altcoin market is only 40% and bitcoin still dominates the main share of cryptocurrencies with 60% market share. However, the rise of certain types of altcoins may grow to take a larger share as they become more popular. 

Many types of altcoins function in the same way as bitcoin, which works as a peer-to-peer system with computers that deal with huge amounts of data. There are some altcoins, however, that work differently. Bitcoin creates blocks through computers solving complex problems. This approach is seen as energy and time-intensive. Some forms of altcoins expedite this process and save energy using smart contracts on other crypto assets. 

Many new altcoins were developed to address issues and provide remedies for bitcoin’s shortcomings. However, others are created solely to take money from people who are looking for the best altcoins to invest in 2021. 

Altcoin frauds are often advertised on social media and are accompanied by extravagant promises to double or triple money in a short space of time. Unfortunately, 80% of ICOs are nothing more than Altcoin frauds, and it is important to look carefully before looking for altcoins to buy. 

Categories of Altcoins

There are thousands of new coins on the altcoin market, but they usually fall into one of the following categories. 

Mining-Based Altcoins

These altcoins, like bitcoin, have to be mined. This means creating blocks through computers solving complex math problems. Litecoin, ZCash, and Monero are produced through this block method. New altcoins that are not based on mining are “pre-mined” and do not depend on an algorithm before they hit the altcoin market. Ripple is one example of these pre-mined digital coins. 

Security and Utility Tokens

Security tokens are among the best altcoins to invest in today because they are connected to assets and have a certain amount of stability and like stocks, can return dividends. These altcoins are like buying stock, but in digital form. 

Utility coins are created by a specific company or service and are used for purchases of goods or services within that specific network. Think of tokens you purchase at a fair to spend on rides. This is the digital equivalent of that system. 

Stablecoins

One of the complaints consumers had with bitcoin was the volatility in its price. For instance, between October 2020 and April 2021, bitcoin rose from $10,000 to nearly $60,000, before collapsing back down again. Some traders like to game this volatility and others want something more stable. 

Stablecoins keep altcoin prices from fluctuating too much by connecting them other assets, currencies or precious metals that have more stability. Stablecoins are among the best altcoins to invest in for those who are more risk-averse and are concerned about the price volatility of bitcoin. 

About Altcoin Scams

Along with legitimate new altcoin, there are unfortunately many altcoin scams. It is important to keep in mind that Altcoin frauds outnumber real opportunities, so research the new altcoin well before buying it. One trick is that scammers will get investors to buy a defunct form of altcoin that is no longer active. 

The following are some essential steps to take to avoid losing money in altcoin frauds:

  • Work only with a licensed cryptocurrency platform or with a regulated broker
  • Research the currency well before buying. 
  • Purchase it with a method other than cryptocurrencies
  • Find press or media about the cryptocurrency — not just press releases
  • The cryptocurrency should be associated with a secured website
  • There should be significant research and white papers on the altcoin
  • Find out who is behind the altcoin and what their credentials are

The main drawback for people who want to invest in altcoin is the lack of regulation of cryptocurrency. Stocks, fiat currencies, precious metals, and other assets have government organizations that provide oversight and can crackdown on fraud. Cryptocurrency as of yet has very little regulation and therefore, there is less recourse for the consumer in the case of altcoin scams than there is for securities fraud. 

Taking the time to investigate a new altcoin is an important step to avoid altcoin scams. If you have lost money in a crypto scam, it is important to find the best fund recovery agency you can. Cryptocurrency can be recovered by experts, despite certain challenges. For successful fund recovery from an altcoin scam,  you need professionals who create intelligence reports and work closely with law enforcement and regulators.

MyChargeBack experts provide guidance to consumers who are trying to recover their funds from broker disputes, Altcoin scams, or other types of fraud. We consult with clients, research brokers, and create intelligence reports that will assist in fund recovery. In addition, we help clients retrieve their funds through chargebacks, wire recall, and crypto recovery. 

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