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What is altcoin and how is it used?

Banxe Team
3 min read 29.06.2022
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An altcoin, a combination of the word “alternative” and “coin”, is a cryptocurrency other than Bitcoin. In particular, it is a cryptocurrency that uses a different algorithm or blockchain from BTC, and is maintained by other developers. It may seem confusing, but ultimately an altcoin is just another cryptocurrency that uses a different fundamental model. Think of the altcoins, such as Litecoin and Ethereum, as Bitcoin’s younger sibling. 

 

There are thousands of altcoins on the market that are meant to increase cryptocurrencies’ adoption and usage. The most popular altcoins are: 

  • Ethereum 

  • Litecoin 

  • Dogecoin 

  • Solana 

  • BNB 

 

How to buy altcoins? 

Out of the thousands altcoins,the most popular ones can easily be purchased on multiple exchanges. On Banxe, you can buy 500+ altcoins with EUR, USD, or GBP. If you are looking for less popular altcoins, you may consider a decentralised exchange, which gives you a more comprehensive selection of cryptocurrencies. However, buying crypto on a decentralised exchange can be riskier due to lower regulatory requirements and lower liquidity levels.  

 

Types of altcoins

Among thousands of altcoins, there are several types on the market:

  • Security tokens 

  • Utility tokens 

  • Meme coins

  • Governance Tokens

  • Stablecoins

 

Is it risky to invest in altcoins? 

As with any cryptocurrencies, altcoins are high-risk investments. Altcoins are highly volatile and may be less fundamental. Hundreds of altcoins are created daily, and hundreds of altcoins are liquidated. It’s always suggested to do your research (DYOR) for every altcoin you want to buy, and never simply trust recommendations and unbelievably APYs. 

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