The cryptocurrency market is becoming one of the new investment platforms with good experiences and growth. It is an exchange market without intermediaries, speedy trade, and with no or low brokerage costs. So even if individuals invest small amounts of money in cryptocurrency investment at the right time and make the right choice, they will get big rewards.
Undoubtedly, individuals can earn many rewards from cryptocurrency investment, but it does not mean that risks are not involved in this market. So before investing, take suggestions from crypto traders so that you can know about options you have and make the best choice for yourself. Cryptocurrencies are also exciting and have become famous because they offer speculative traders a volatile asset to earn daily profits.
Many cryptocurrencies exchanges offer traders to deal in various cryptocurrencies such as Wazirx, Coinbase, Birmart, Binance, Coinmarketcap, etc. Navigating or trading across the world of cryptocurrencies may be confusing for you because of its technical jargon. All derivatives fall under overarching themes in cryptocurrency exchange, from blockchain to token and coins, so newcomers need to learn many things.
If you are a beginner, the most important difference you should know is the correlation between a Bitcoin, a Stablecoin, and an Altcoin. These all types of cryptocurrencies coins have their strengths and weaknesses because they differ from each other. So in this article, we discuss the definition and difference between bitcoins, stablecoins, and altcoins.
Difference Between Bitcoins, Stablecoins, And Altcoins
What Is Bitcoin?
Bitcoin is the most popular, famous, and used cryptocurrency in the world. It was the first cryptocurrency that successfully entered the exchanges and mainstream market. Satoshi Nakamoto created it in 2009; then, bitcoin has changed the way money returns.
The reason behind its success is that bitcoin was the first that showed up on the scene. It is the first cryptocurrency that was born thanks to new technology and network called a blockchain. Blockchain supports proof-of-work mining algorithms and works towards one goal (speedy digital transactions without intermediaries in between). Blockchain is a technology that opens a new door of possibilities for the world in which many start-ups and companies can invest.
Five years ago, the price of bitcoin was $500, and according to 30 September 2021 records, its price is now $43000 (growth about $8600%). It is one of the cryptocurrencies which has been tried and tested by all types of industries till now. Bitcoin’s first mover and blockchain technology give it a massive advantage. Bitcoin dominates the crypto industry with a spectacular 79% market share. One thing to keep in mind: all investments come with risks, so bitcoin also includes risks.
Strengths Of Bitcoin:
- Name values.
- Durable because of its halving events.
- The price of bitcoin has consistently gone high in recent years.
Weaknesses Of Bitcoin:
- Highly unstable.
- The difficulty of mining has grown with recent halving events.
What Is Stablecoin?
A stable coin is one type of cryptocurrency, and its value links to an outside source like the American dollar or gold, which gives the coin stable value. In other words, stablecoin means a digital currency pegged to be a stable reserve asset like US gold or dollar.
The stablecoins are mainly designed for reducing instability relative to unpegged cryptocurrencies such as Bitcoin. Cryptocurrency is known to experience massive dips and spikes in prices; this makes it off-putting for the investors who like to favor fiat money’s stability. At that time, stablecoin came for that type of investor.
The combination of digital asset flexibility with traditional asset stability proves that this idea is popular wildly. In one year, billions of dollars in value have flowed into stablecoin such as the USD coin as they have become the most famous ways to trade or store value in the crypto ecosystem.
Strengths Of Stablecoin:
- Its reliability because in this there are no sudden drops.
- It is consistent because their prices remain the same.
- Provides safety
Weaknesses Of The Stablecoin:
- No chance of high profit because of no massive spike.
- It looks more like an investment instead of a coin.
- Secure for an outside source.
What Is An Altcoin?
The abbreviation meaning of altcoin is “alternative to bitcoin” and shows all the cryptocurrencies, not Bitcoin. Altcoins include Litecoin, Ethereum, Dogecoin, etc. The altcoins are unique because they do not overpower Bitcoin but try to move forward with innovation. For example, VeChain is famous for its spectacular contribution to supply chain management.
On the other hand, Cardano and Ethereum are platforms that open new doors for building a decentralized finance sphere and allow others to create decentralized applications smoothly. In the crypto market still, bitcoin is the king; altcoins have yet to reach that king level. Therefore, altcoins do not have that much impact as bitcoin.
Types Of Altcoins:
- Security Tokens
- Utility tokens
- Mining-based altcoins
- Pre-mines coins
Strengths Of Altcoins:
- Backup plan for investors if bitcoin fails.
- Gives a platform to grow.
- Has unique functions like ethereum who is also a developer platform.
Weaknesses Of Altcoins:
- Second choice of many investors because of bitcoin.
- Not in the limelight because of bitcoin.
- Less name value.
What Is The Main Difference Between Bitcoin, Stablecoin, And Altcoin?
Bitcoin enjoys an independent identity from other coins and tokens because it was the first cryptocurrency to enter the crypto exchange market. Stablecoins are the type of altcoins, and that coins do not experience unstable spikes because their value remains the same or stable. Altcoins include all crypto coins except bitcoin. It is also known as an alternative to bitcoin.
Best Cryptocurrencies Exchanges To Trade In Bitcoins, Stablecoins, And Altcoins:
The cryptocurrency exchange market is vast. It has a lot of technical terms or jargon, which is difficult for a beginner to understand. In crypto exchange or trade, you can invest or trade in different tokens and coins. But sometimes people do not know about the coins and how they differ from each other, so they may not choose the right one for them. In this article, we mention the above information about three coins bitcoin, stablecoin, and altcoin. I hope you can understand the difference between them.