The difference between altcoins and Bitcoin is often a subject of confusion to new and casual Internet users. Often, they see altcoins as a cheaper way to trade. That is, altcoins act like a digital cash for the Internet. However, there are some important differences.
For example, the price of altcoins vs Bitcoin is not determined by the demand or supply side. The value is determined by demand and supply, two factors that have no relationship with each other. Therefore, altcoins vs Bitcoin cannot be compared on the basis of their value. The same holds true with their value in comparison with other virtual currencies on the Internet. Both of them are valued by their owners and that is where the similarities end.
In contrast, both currencies are priced by supply and demand. When an investor or buyer wants to buy an altcoin, it means he wants to trade or sell an equivalent amount of his currency to the seller. Therefore, the supply and demand concept has an influence on how value for money is determined. altcoins have never had a major economic crash like the collapse of the former Zimbabwe currency, the hyperinflation of Argentina during the Argentina Commodity Forex Crisis, or the devaluation of the Thailand baht. Therefore, if you want to make a profit buying and selling altcoins, you should be prepared for a long, drawn out battle between the constant fluctuations in value and the willingness of both parties to engage in a long drawn out battle over the value of their particular virtual currency.
On the other hand, investors and traders who buy into altcoins are doing so because they believe that the future of this virtual currency is bright. Since there is not a major crash, the value is likely to increase significantly in the future. However, while this optimism is quite understandable, some pessimists also predict that the value of the currencies will eventually crash due to a combination of factors. The best way to protect yourself from this kind of crash is to diversify your portfolio by including a mix of both altcoins and traditional currencies. This way, you can minimize the impact of a potential crash as well as enjoy a steady growth in value.
One of the key comparisons between the two is the level of market competition between them. While most people are focused on the differences between Litecoin and Bitcoins, there is another important dimension that should be considered as well: the efficiency of the different cryptosystems. Both of these cryptosystems, namely Litecoin and Dash, have built in weaknesses that can be exploited by high profile investors.
For example, while Dash has very low transaction fees, this feature attracts more users than the lower transaction costs of many other competing currencies. Consequently, it attracts more opportunists who can use this feature to run up an attack on your investment. Whereas some altcoins like Litecoin allow users to charge fees for transactions, the protection against this attack is weak. Therefore, while it may seem that Dash has a low barrier to entry, if you consider investing in it, you are greatly relying on a weak protection mechanism and leaving yourself wide open to high level attacks on your investment.
In contrast, it is rare to find any form ofICO that do not provide some form of economic incentive to their owners. In particular, Dash offers a discount on each transaction, which means that it attracts businesses, which use the discounting ability to boost sales. If you consider the level of market confidence that many businesses have in Dash, this makes it less of a surprise that a great deal of people are investing in it as a currency alternative as well as a token in the virtual world. Hence, it is much more important for altcoins than it would be for mainstream currencies to have a strong economic incentive to gain users. While there may not currently be a clear winner here, considering the market dynamics, it is safe to say that altcoins will continue to play an increasing role as the cryptocurrencial landscape continues to evolve.
This concludes our look at the differences between altcoins and bitcoins. We have seen that there are many potential benefits from the growth of Dash, but also that it faces certain constraints that limit its ability to deliver on these benefits. On the one hand, it lacks the monetary incentive that many other cryptosystems have. On the other hand, it enjoys a market size that allows it to oversell many competing currencies on the same platform. In the end, it does offer something that no other token can: the chance to hold a global role in the global economy
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