Cryptocurrencies After Bitcoin - Altcoins And Meme Coins| FXMAG.COM

Cryptocurrencies are certainly an area that has become increasingly popular in recent years. However, it requires some familiarity with new terms and understanding how the modern investment market in this industry works.

Altcoin

Definition

At the very beginning, only Bitcoin was known as the first cryptocurrency in the world that was based on blockchain technology. But the question arises, what is an altcoin? It is primarily a term for an alternative coin, built from the combination of the English words alternative and coin. An altcoin is any new currency that was created after Bitcoin, even if it uses the same software.

Altcoin vs Bitcoin

Altcoins are referred to as cryptocurrencies or tokens - regardless of the name, they share similar keys used to transfer currency between owners' virtual wallets. Many types of altcoins are built on a similar system as Bitcoin, but each has distinctive features - some focus on improving features that Bitcoin was less than perfect.

Altcoin is a lower value currency, which makes it perfect for smaller transactions. There is also a difference between Bitcoin and altcoin in terms of the number of cryptocurrency units in circulation or determining the maximum number of coins.

More and more cryptocurrencies are becoming serious competition for Bitcoin, and Altcoins worth attention are primarily those that use ready-made platforms or create their own with a specific specificity. Thanks to this, several of the largest Altcoins stand out on the market, such as: Ether, Ripple and Litecoin.

Memecoins

What is it?

Meme coins are cryptocurrencies inspired by memes or jokes on the Internet and social media.

Meme coins are usually very volatile. They are mostly community driven and can go viral overnight with online community endorsements and FOMO. Still, their price may also drop unexpectedly as investors turn their attention to the next meme coin.

Another feature of meme coins is that they often have a huge or unlimited supply. Since meme tokens generally do not have a coin-burning mechanism, the huge supply explains their relatively low prices. For just $1, you can buy millions of meme tokens.

The first

The first meme coin created was Dogecoin (DOGE). Released in 2013 as a parody, DOGE was inspired by the popular Doge meme, which is a Japanese Shiba Inu dog with a rather funny expression.

Other meme coins

Shiba Inus (SHIB) is DOGE's rival and is often referred to as the "Dogecoin Killer". The main difference between DOGE and SHIB is that the latter has a limited supply of 1 quadrillion tokens.

Dogelon Mars (ELON) closely follows the dog duo in terms of popularity. As the name suggests, ELON is named after Tesla CEO Elon Musk and his passion for SpaceX. ELON is a fork of Dogecoin and has a supply of 557 trillion tokens in circulation.

The risk

As with all cryptocurrencies, trading and investing in meme coins involves high financial risk.

Compared to BTC, most meme coins tend to be inflationary with no maximum supply. Their ecosystem, uses, and foundations are often defined by collective community jokes. Only a few meme coins have been built on big cryptocurrency technology.

Another potential risk is that meme coins are heavily community-driven and more speculative than larger market cap cryptocurrencies. This instability constantly leads to unexpected ups and downs. The life cycle of meme coins is generally short-lived.

FOMO

Discussing meme coins, FOMO appeared as a factor affecting the situation of cryptocurrencies, but what is it?

FOMO is short for "Fear of Missing Out", so it's also a psychological term. In practice, the FOMO phenomenon can be illustrated with a simple example in which you learn about a new coin with huge potential. Everyone is talking about it, and the media is starting to present it as the new Bitcoin. Everything indicates that its price will increase rapidly and rapidly, so in fear of missing out, you decide to buy it without much thought. This is FOMO, i.e. taking action not based on analysis and reason, but emotions related to the fear of missing the "opportunity".

FOMO also can be a marketing strategy to use by creating investor fear of losing out as a way to encourage investors to act.

Source: investing.com,