The real money that we are talking about is the cold hard physical cash in your hands that you have been using as a mode of payment to buy things. These coins and paper of value, collectively referred to as FIAT, lately is experiencing undercurrent turbulence in its turf due to the flocking arrival of digital money or cryptocurrencies. These “new kids on the block” are making heads turn and think, “Why not”? They are, after all, fresh and good-looking, promising comfort and convenience to improve lifestyles, which are major components of invention and innovation. “We already have accepted Bitcoin as a neighbor which is still under observation. Is there a need for more?”, skeptics would ask.
Let us see what these fresh-looking guys can bring to the table.
Altcoins are token-based alternatives to Bitcoin and they came into being by taking advantage of the many things Bitcoin cannot do. Hence, alternative coins.
In terms of speed, Altcoins are faster. They can finish a transaction in a matter of seconds as compared to Bitcoin’s 10-minute average. Technical flaws can be corrected quick, unlike Bitcoin whose heavy traffic won’t allow.
They have better designs. Altcoins were designed to concentrate in areas suited for the purpose. While Bitcoin’s mainframe caters to payments and transfer of high- value currencies, altcoins pointed to smaller transaction volumes and smart contracts.
They come in cheap. Bitcoin prices are soaring high and the new but wise investor would not dare step yet into its volatile path. From down up would be a wise step in investment. Altcoins are mostly affordable and losses in case will not hurt that much.
They offer better returns. Profits to be earned in Altcoins are higher in percentage as users increase and the money put together raises its value.
But can Altcoins hold a candle against the Fiat?
While others are jumping on the bandwagon, some are critical and voicing out reasons that Altcoins must hurdle first in order to gain their trust and confidence. Is it legit? Is it stable? Is it secured? Is it worldwide?
Fiat currency is backed by a central bank of a country that has faith in it, the value of which is marketed at the Forex, or foreign exchange. Altcoins are decentralized and nobody can be held responsible once you seek redress. That lends to its high volatility and would so rely on Bitcoin fluctuations. Since it is basically everything Bitcoin and resides in the digital world, altcoins can be prone to hacking and theft, electricity bogdowns, and intermittent connectivity, among others. But then corrective measures are in place and occurring problems are currently being sorted out and addressed to make sure its path towards mainstream exchange adaptation can readily take place.
One innovation of note is the stablecoin which is a collateralized form of altcoin. Though it may run against the decentralization concept, this idealistic compromise can test the confidence of governments and of the majority that can be the defining factor towards becoming the standard the almighty fiat is boasting of. We have yet to see them at NASDAQ or maybe having its own ETF but one thing is for sure, they are in it for the game.