One coin price tracker indicates there are more than 18,000 coins currently being traded. Some coins come and go, as with any securities. Nevertheless, people who invest in cryptocurrency have no shortage of options to diversify their portfolios.
Getting started with such a broad range of options can overwhelm new investors. Cryptocurrency, for beginners, presents a lot of information without much context. How can new investors get up to speed with the dizzying array of options?
We’ll try to take the confusion and guesswork out of the process. We will get you there, even if you’re still dealing with basic questions like “How does cryptocurrency work?”
Cryptocurrency for Beginners: Altcoins
“Altcoin” refers to any cryptocurrency besides Bitcoin. Some people might quibble with the idea of some of the other larger coins, such as Ethereum, being classified as altcoins.
Thus far, altcoins have a lower price than Bitcoin. For those looking to invest in cryptocurrency but intimidated by the high price of BTC, altcoins provide a clear starting point.
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Advantages and Disadvantages of Altcoins
Investing in altcoin projects has some major potential upsides, but comes with downsides to match. Weighing such an investment takes time and care.
Altcoins often come with lower power demands and faster transaction speeds than Bitcoin. Bitcoin’s early deployment gives it the leg up that comes with being first, but altcoins have a technological edge.
The potential reward of an altcoin taking off can get large fast. An altcoin worth fractions of a cent can multiply in value a hundredfold simply by making it to a valuation of one or two cents. On the other hand, many altcoin projects seek only to scam potential investors.
Getting invested in altcoins also has some logistical barriers. Not every exchange carries every coin, so if you want to check the Chainlink price, you’ll need to search around. To invest in altcoin, you’ll have to track down which exchanges carry it.
Do these tradeoffs make an altcoin the best cryptocurrency to invest in? The answer lands at “it depends.”
Altcoins can do a lot for your portfolio if you’re willing to spend time and effort on research. Not all altcoins are built the same, and some of them carry greater risk than others. As mentioned before, some even turn out to be scams.
The large number of coins coupled with the high risk makes them a poor fit for casual investors. If you’re a hands-on investor who loves to review a coin’s long-term viability and potential upsides, though, you can make solid money on altcoin projects.
If you take one thing away from this guide to cryptocurrency, it should be this: do your research.
Altcoins: Is the Risk Worth It?
Only an individual investor can be certain of the amount of risk worth taking. Altcoins make a poor cryptocurrency for beginners, but those who’ve gotten comfortable in the field and know what to look for can make good money on them.
Has crypto caught your eye for technological reasons? Are you interested in the fine points of what the technology can do? Give our technology articles a glance.