Buy The Only Crypto Currency Investing Book You Need here: https://amzn.to/3Zt9vgj

While still considered the king by many, Bitcoin is no longer the only player in the crypto market.

New crypto coins are popping up all the time. There are literally tens of thousands of them.

An altcoin is any cryptocurrency that is not Bitcoin.

Literally, it's an alternative coin to Bitcoin, hence the name, altcoin.

Many altcoins were created to overcome faults people found in Bitcoin or in order to perform specific functions. Many have been successful, such as Cardano, Solana, and Ethereum.

Others have been made as a farce and are often scams, but even some of these have gained popularity, such as Dogecoin.

Altcoins can be classified by their functionality, and some can have multiple classifications.

Here are some of the categories:

Transaction Coins: Used like money. Bitcoin is a classic transaction coin.

Stablecoins: These have their value pegged to a real world asset, such as a fiat currency of precious metals. They are considered less volatile than other cryptocurrencies.

Security Tokens: The digital version of stocks. They can appreciate in price as a company grows and are relatively stable.

Utility Token: These are used to purchase utilities or services, redeem rewards, or pay network fees. You can compare them to transport passes or gift cards.

Meme Coins: These are coins that have no intrinsic utility. Buying these is basically gambling and many of them are scams.

It would be wise to stay away from any alt coin that falls into one of these categories:

Unlimited supply: If more can be created at a whim, then there is the possibility for massive inflation.

Premined coins: Among other issues, premined coins are more susceptible to market manipulation. DASH and XRP fall into this category.

Centralized: A coin issued by a single entity goes directly against the philosophy of crypto. XRP is one example of this.

No USP: If the coin doesn’t solve a problem that bitcoin doesn’t already solve, then it has no Unique Selling Point. This is true of the majority of altcoins, including nearly all meme coins.

Too much utility: On the flipside to no USP, a coin may boast many utilities. This is a red flag.

Although you should stay away from the majority of altcoins, there are a few which add real utility to the world and can be considered for long-term investment.

Ethereum: A platform with thousands of applications currently running on its network.

Polkadot: This is popular with Web3 developers because it can process multiple transactions across different blockchains.

Aave: A decentralized lending and borrowing platform. You can deposit your crypto and earn interest on it.

Cardano: Has a unique multi-layer architecture which allows it to be faster and more energy efficient.

Read the next chapter here.

Buy The Only Crypto Currency Investing Book You Need here: https://amzn.to/3Zt9vgj