Bitcoin V/S Altcoin: How To Assess A Cryptocurrency In 5 Easy Steps

Cryptocurrency is a collection of binary data that functions as a means of trade in simple words.

Moreover, cryptocurrency is a decentralized form of currency. In other words, it means that cryptocurrency is not under any government control.

What is bitcoin?

Bitcoin is a type of cryptocurrency. It uses cryptography technology to keep it secure. There are no physical bitcoins as such, only balances are kept on a public platform to which everyone has open access. All the records are encrypted. All Bitcoin transactions are usually verified by a large amount of computing power through a process called mining. Bitcoin is neither issued or guaranteed by any banks or government agencies, and no one bitcoin is worth anything as a commodity.

What is Altcoin?

The term "altcoin" is made up of the phrases "alternative" and "coin," and it refers to all Bitcoin alternatives. Bitcoin and altcoins have a very similar overall architecture. As a result, they share a code and function as peer-to-peer systems or as a computer capable of simultaneously processing massive volumes of data and transactions.

How to assess cryptocurrency?

The use of cryptocurrency is growing with time. There are many custom mobile app development companies that allow the use of cryptocurrency. Here are some steps that would help you to assess cryptocurrency:

• Function: Altcoins are created with a particular set of use cases that aims to solve a problem in any of the given industries via a blockchain solution. An altcoin that has got no clear-cut function will also have no future in terms of store value.
• Developers and Support: In the same way that you would assess a company's worth based on the strength of what its team has done so far to generate business, you should keep a careful eye on the specific team that is managing the crypto project behind the altcoin that you are examining. You may start by looking at the team's developers and their track records.
• History and Reputation: A crypto project and all of its linked altcoins may include team members with reputable CVs on occasion. But it is not a guarantee that the particular altcoin will be a successful one. Occasionally, occurrences in an altcoin's past may have an impact on the favourable judgements you've previously made regarding that crypto asset.
• Volume: If you’re a type of investor who is confident enough to explore extremely new projects and can bear high-risk investments, you should also once look into the altcoin’s open market performance. Along with researching the price history, you can also check for the altcoin’s market health via its trade volume.
• Accessibility: For the altcoin, you’re researching, you should once check how easily you can acquire the asset. An altcoin that’s a bit difficult to access is likely to cause more of an inconvenience rather than a proper asset.

Author Bio

Prashant Pujara is the founder and CEO of MultiQoS Technologies Pvt. Ltd., a leading frontend development company that provides digital development solutions to businesses and enterprises.