Altcoin or bitcoin season

Welcome to part three of our series of articles designed to help you understand alt seasons, a stage in the crypto price cycle when altcoins outperform Bitcoin. It's an exciting time for the crypto investor, and given the amount of evidence suggesting that an alt season may be incoming, getting up to speed will place you in good stead to make the most of it. We examined how entire ecosystems of software and applications have been developed on top of the key altcoin technologies like Ethereum, Solana and BNB and we promised to show you some key indicators to look out for when trying to decide if an alt season is on the cards. Part two looked at some key metrics to keep an eye on when trying to predict the dawn of an alt season. We saw how Bitcoin dominance has been on a sharp downward trend since the beginning of

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Content:

• What are altcoins? A guide to the cryptocurrencies beyond Bitcoin
• Top 5 Promising Altcoin projects to kick off 2021
• What are the top altcoins picks for this year?
• Price of Bitcoin and other altcoins plunges and exchange trading falters on pivotal day for crypto
• Traders Issue Warnings as Altcoins are Booming and Bitcoin Consolidates
• Bitcoin dominance slips, bringing memories of 2017 ‘alt season’
• What are altcoins and how are they different from Bitcoin?
• Altcoins Are Still Far From All-Time Highs As Bitcoin Breaks Records

WATCH RELATED VIDEO: This is EXACTLY What Altcoin Seasons Is - Crypto History Lesson

What are altcoins? A guide to the cryptocurrencies beyond Bitcoin

A cryptocurrency , crypto-currency , or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank , to uphold or maintain it. Individual coin ownership records are stored in a digital ledger , which is a computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership.

In a proof-of-stake model, owners put up their tokens as collateral. In return, they get authority over the token in proportion to the amount they stake. Generally, these token stakers get additional ownership in the token over time via network fees, newly minted tokens or other such reward mechanisms.

Cryptocurrency does not exist in physical form like paper money and is typically not issued by a central authority. Cryptocurrencies typically use decentralized control as opposed to a central bank digital currency CBDC. When implemented with decentralized control, each cryptocurrency works through distributed ledger technology, typically a blockchain , that serves as a public financial transaction database.

A cryptocurrency is a tradable digital asset or digital form of money, built on blockchain technology that only exists online. Cryptocurrencies use encryption to authenticate and protect transactions, hence their name. There are currently over a thousand different cryptocurrencies in the world, and their supporters see them as the key to a fairer future economy.

Bitcoin , first released as open-source software in , is the first decentralized cryptocurrency. In , the American cryptographer David Chaum conceived an anonymous cryptographic electronic money called ecash. This allowed the digital currency to be untraceable by the issuing bank, the government, or any third party.

In , Wei Dai published a description of "b-money", characterized as an anonymous, distributed electronic cash system. In , the first decentralized cryptocurrency, bitcoin, was created by presumably pseudonymous developer Satoshi Nakamoto.

It used SHA , a cryptographic hash function, in its proof-of-work scheme. Soon after, in October , Litecoin was released. It used scrypt as its hash function instead of SHA On 6 August , the UK announced its Treasury had commissioned a study of cryptocurrencies, and what role, if any, they could play in the UK economy.

The study was also to report on whether regulation should be considered. In June , El Salvador became the first country to accept Bitcoin as legal tender , after the Legislative Assembly had voted 62—22 to pass a bill submitted by President Nayib Bukele classifying the cryptocurrency as such.

In August , Cuba followed with Resolution to recognize and regulate cryptocurrencies such as bitcoin. In September , the government of China , the single largest market for cryptocurrency, declared all cryptocurrency transactions illegal, completing a crackdown on cryptocurrency that had previously banned the operation of intermediaries and miners within China.

According to Jan Lansky, a cryptocurrency is a system that meets six conditions: [28]. In March , the word cryptocurrency was added to the Merriam-Webster Dictionary.

Tokens, cryptocurrencies, and other types of digital assets that are not bitcoin are collectively known as alternative cryptocurrencies, [30] [31] [32] typically shortened to "altcoins" or "alt coins", [33] [34] or disparagingly known as "shitcoins". The term is commonly used to describe coins and tokens created after bitcoin.

Altcoins often have underlying differences with bitcoin. For example, Litecoin aims to process a block every 2. Significant rallies across altcoin markets are often referred to as an "altseason". Stablecoins are altcoins that are designed to maintain a stable level of purchasing power. Decentralized cryptocurrency is produced by the entire cryptocurrency system collectively, at a rate which is defined when the system is created and which is publicly known.

In centralized banking and economic systems such as the US Federal Reserve System , corporate boards or governments control the supply of currency. The underlying technical system upon which decentralized cryptocurrencies are based was created by the group or individual known as Satoshi Nakamoto. As of May [update] , over 1, cryptocurrency specifications existed.

Most cryptocurrencies are designed to gradually decrease the production of that currency, placing a cap on the total amount of that currency that will ever be in circulation. The validity of each cryptocurrency's coins is provided by a blockchain. A blockchain is a continuously growing list of records , called blocks , which are linked and secured using cryptography.

It is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way". Once recorded, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.

Blockchains are secure by design and are an example of a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been achieved with a blockchain.

In the world of cryptocurrency, a node is a computer that connects to a cryptocurrency network. The node supports the relevant cryptocurrency's network through either; relaying transactions, validation or hosting a copy of the blockchain.

In terms of relaying transactions each network computer node has a copy of the blockchain of the cryptocurrency it supports, when a transaction is made the node creating the transaction broadcasts details of the transaction using encryption to other nodes throughout the node network so that the transaction and every other transaction is known. Node owners are either volunteers, those hosted by the organisation or body responsible for developing the cryptocurrency blockchain network technology, or those who are enticed to host a node to receive rewards from hosting the node network.

Cryptocurrencies use various timestamping schemes to "prove" the validity of transactions added to the blockchain ledger without the need for a trusted third party. The first timestamping scheme invented was the proof-of-work scheme. The most widely used proof-of-work schemes are based on SHA and scrypt. The proof-of-stake is a method of securing a cryptocurrency network and achieving distributed consensus through requesting users to show ownership of a certain amount of currency.

It is different from proof-of-work systems that run difficult hashing algorithms to validate electronic transactions. The scheme is largely dependent on the coin, and there's currently no standard form of it. Some cryptocurrencies use a combined proof-of-work and proof-of-stake scheme. In cryptocurrency networks, mining is a validation of transactions. For this effort, successful miners obtain new cryptocurrency as a reward. The reward decreases transaction fees by creating a complementary incentive to contribute to the processing power of the network.

With more people venturing into the world of virtual currency, generating hashes for validation has become more complex over time, forcing miners to invest increasingly large sums of money to improve computing performance. Consequently, the reward for finding a hash has diminished and often does not justify the investment in equipment and cooling facilities to mitigate the heat the equipment produces , and the electricity required to run them.

As of July [update] , bitcoin's electricity consumption is estimated to about 7 gigawatts, 0. Some miners pool resources , sharing their processing power over a network to split the reward equally, according to the amount of work they contributed to the probability of finding a block.

A "share" is awarded to members of the mining pool who present a valid partial proof-of-work. As of February [update] , the Chinese Government has halted trading of virtual currency, banned initial coin offerings and shut down mining. Many Chinese miners have since relocated to Canada [55] and Texas. In March , the city of Plattsburgh in upstate New York put an month moratorium on all cryptocurrency mining in an effort to preserve natural resources and the "character and direction" of the city.

An increase in cryptocurrency mining increased the demand for graphics cards GPU in Miners regularly buy up the entire stock of new GPU's as soon as they are available. Nvidia has asked retailers to do what they can when it comes to selling GPUs to gamers instead of miners. A cryptocurrency wallet stores the public and private "keys" address or seed which can be used to receive or spend the cryptocurrency.

With the public key, it is possible for others to send currency to the wallet. There exist multiple methods of storing keys or seed in a wallet from using paper wallets which are traditional public, private or seed keys written on paper to using hardware wallets which are dedicated hardware to securely store your wallet information, using a digital wallet which is a computer with a software hosting your wallet information, hosting your wallet using an exchange where cryptocurrency is traded.

Bitcoin is pseudonymous rather than anonymous in that the cryptocurrency within a wallet is not tied to people, but rather to one or more specific keys or "addresses". Still, cryptocurrency exchanges are often required by law to collect the personal information of their users. Additions such as Monero , Zerocoin , Zerocash and CryptoNote have been suggested, which would allow for additional anonymity and fungibility. Cryptocurrencies are used primarily outside existing banking and governmental institutions and are exchanged over the Internet.

Proof-of-work cryptocurrencies, such as bitcoin, offer block rewards incentives for miners. There has been an implicit belief that whether miners are paid by block rewards or transaction fees does not affect the security of the blockchain, but a study suggests that this may not be the case under certain circumstances. The rewards paid to miners increase the supply of the cryptocurrency. By making sure that verifying transactions is a costly business, the integrity of the network can be preserved as long as benevolent nodes control a majority of computing power.

The verification algorithm requires a lot of processing power, and thus electricity in order to make verification costly enough to accurately validate public blockchain. Not only do miners have to factor in the costs associated with expensive equipment necessary to stand a chance of solving a hash problem, they further must consider the significant amount of electrical power in search of the solution.

Generally, the block rewards outweigh electricity and equipment costs, but this may not always be the case. The current value, not the long-term value, of the cryptocurrency supports the reward scheme to incentivize miners to engage in costly mining activities. Some sources claim that the current bitcoin design is very inefficient, generating a welfare loss of 1.

However, the efficiency of the bitcoin system can be significantly improved by optimizing the rate of coin creation and minimizing transaction fees. Another potential improvement is to eliminate inefficient mining activities by changing the consensus protocol altogether.

Transaction fees for cryptocurrency depend mainly on the supply of network capacity at the time, versus the demand from the currency holder for a faster transaction. For Ether , transaction fees differ by computational complexity, bandwidth use, and storage needs, while bitcoin transaction fees differ by transaction size and whether the transaction uses SegWit. Some cryptocurrencies have no transaction fees, and instead rely on client-side proof-of-work as the transaction prioritization and anti-spam mechanism.

Cryptocurrency exchanges allow customers to trade cryptocurrencies [79] for other assets, such as conventional fiat money , or to trade between different digital currencies. Atomic swaps are a mechanism where one cryptocurrency can be exchanged directly for another cryptocurrency, without the need for a trusted third party such as an exchange. The kiosk installed in Austin, Texas, is similar to bank ATMs but has scanners to read government-issued identification such as a driver's license or a passport to confirm users' identities.

An initial coin offering ICO is a controversial means of raising funds for a new cryptocurrency venture. An ICO may be used by startups with the intention of avoiding regulation. However, securities regulators in many jurisdictions, including in the U. In an ICO campaign, a percentage of the cryptocurrency usually in the form of "tokens" is sold to early backers of the project in exchange for legal tender or other cryptocurrencies, often bitcoin or Ether.

According to PricewaterhouseCoopers , four of the 10 biggest proposed initial coin offerings have used Switzerland as a base, where they are frequently registered as non-profit foundations. The Swiss regulatory agency FINMA stated that it would take a "balanced approach" to ICO projects and would allow "legitimate innovators to navigate the regulatory landscape and so launch their projects in a way consistent with national laws protecting investors and the integrity of the financial system. The "market cap" of any coin is calculated by multiplying the price by the number of coins in circulation.

Top 5 Promising Altcoin projects to kick off 2021

He gives his picks on some small cap altcoin coins that he believes will outperform over this next potential altcoin season. According to www. He says that during this time some altcoins will see their prices spike up by as much as x, but that this event only occurs once every one to three years. Birb does urge caution though, and in an article covered by Business Insider, he points out that investing into alts is a risky business, and that there is a significant risk of investors losing funds. He reminds potential investors that they should do their own research and that a return on investment is never guaranteed. However, Birb has made his own picks of altcoins that he believes will make those potential 10 to times gains. Disclaimer: This article is provided for informational purposes only.

What are the top altcoins picks for this year?

While Bitcoin continues to take a beating in terms of dollars, the top cryptocurrency also continues to lose its share over the market cap. In fact, with the most recent support level breached, BTC dominance could be targeting historic lows. Historic lows in BTC dominance could mean that an altcoin season unlike ever before is potentially ahead. At one point, there was only Bitcoin. As the industry grew, a metric was born called BTC dominance that made it more clear how much weight the top coin had compared to the rest of the market. After reaching such extremes in , by , Bitcoin had recovered more than two-thirds of the market cap. At the close of the yearly candle , a several year trading range was officially breached. The well defined range is even more visible in the six-month BTC. D chart.

Price of Bitcoin and other altcoins plunges and exchange trading falters on pivotal day for crypto

When Bitcoin was launched in , it raised eyebrows and evoked a sense of confused curiosity. Digital currency, cryptocurrency and other buzzwords started doing the rounds of the internet. Ever since the way people look at assets and investments has been changing. The phenomenal success of Bitcoin paved the way for many other types of cryptocurrencies. These came to be known as altcoins.

Traders Issue Warnings as Altcoins are Booming and Bitcoin Consolidates

Megan DeMatteo is an editor and poet based in New York. In she helped launch CNBC…. Since then, thousands of new altcoins, or alternative coins, have been created and added into the crypto ecosystem. Ethereum is the most popular altcoin, and people use the full name Ethereum when talking about the broader blockchain network but Ether ETH to discuss the currency itself. There are over 16, types of cryptocurrencies as of January , according to price-tracking website CoinMarketCap. That means there are literally thousands of other coins being exchanged out there in the metaverse.

Bitcoin dominance slips, bringing memories of 2017 ‘alt season’

If you want to make better decisions about allocating your crypto portfolio you need to know how Bitcoin — Altcoin market cycles work. Traders stand to make a killing if they understand the mechanics of market cycles, so in this article, we are going to take you through the basics. For instance, as you can see from the above graph it can be a good idea to buy during a downtrend before the curve swings upwards. This means that when BTC drops in price, there is a strong possibility altcoins will also decrease in value. If more than half of the value in digital assets is concentrated in Bitcoin then its price will affect other coins.

What are altcoins and how are they different from Bitcoin?

Bitcoin dominance has always been calculated at the very top of CoinMarketCap's homepage — but what does that number really mean? But what is the significance of Bitcoin's dominance? Can it tell us anything about the performance of altcoins? And what about those who argue that this metric doesn't give an accurate reflection of the crypto market?

Altcoins Are Still Far From All-Time Highs As Bitcoin Breaks Records

RELATED VIDEO: COULD THIS NEXT MOVE LEAD TO AN ALTCOIN SEASON or BITCOIN SEASON?? (AXS, ETH, BNB) -- Crypto Tagalog

Currently Bitcoin is looking extremely strong, as it continues to hold the 9. At the same time, price failed to break the uptrend trendline, suggesting continuation of the upside momentum. It is possible that Bitcoin will produce a new all time high as soon as the end of This means that price can potentally double in the matter of months.

Altseason altseason is calculated based on the performance of the top 50 Altcoins over 90 days excluding stablecoins and asset-backed tokens. If you look at the top 50 list, it looks like we are enjoying the altcoin season. Surprisingly, the major altcoins currently leading the uptrend are not what you would expect. ADA has gone from being one of the most hyped coins to the one that has disappointed investors the most. At its peak, ADA was the third largest cryptocurrency based on predictions about the emergence of smart contracts. Since then, however, the performance in the charts has been rather bleak. Since most of the tokens on the top performing list are derived from DeFi chains that are performing excellently in this area Terra, Decentraland, Polkadot, etc.

Altcoins, generally speaking, are every cryptocurrency other than Bitcoin. Any crypto coin or token that is not Bitcoin—like Cardano, Solana, Polkadot, and Uniswap—can be considered as an altcoin. Bitcoin, compared with other cryptocurrencies, has by far the largest market capitalization or the total value of issued cryptocurrency.