Whether you’re new to the world of cryptocurrency, or you’ve been mining coins or trading them for several years, there’s no escaping bitcoin. It’s the largest, most popular and most widely recognized of the myriad of options out there. It’s also the forerunner for most altcoins on the market. This is not a figurative reference, either.
Most of the altcoins out there are virtual bitcoin clones. Because bitcoin is built on an open source platform, it’s easy to copy it, and make a few tweaks so your new option stands out from others on the market, and then debut a brand new altcoin. In fact, bitcoin was designed this way intentionally, to make it easier to clone and then modify those clones to be marginally unique.
How Many Coins Copy Bitcoin?
It’s actually impossible to tell how many altcoins are built on the same network/framework and platform as bitcoin. This is because new altcoins are released constantly, sometimes 10 or even 20 different coins per day. In fact, at the end of 2017, there were 1,374 different altcoins out there. Why is this?
The Value of an ICO
In order to really understand the incredible explosion of virtual bitcoin clones, you need to understand the value and purpose of an ICO, or initial coin offering. ICOs are made by companies. And they’re made for specific purposes. Any company can create their own cryptocurrency – cloning bitcoin and creating a new altcoin is not terribly difficult. They just need to put a fresh spin on the coin, and then debut it to their potential buyers.
In most cases, those buyers are actually investors. They’re purchasing coins, and the money from those purchases goes to fuel the company in some specific ways. Most ICOs are done for a particular purpose, with the money raised being used to achieve a stated goal. Think of ICOs as being similar to an IPO (initial public offering), but rather than selling stock in the company, they’re selling altcoins.
ICOs are used every single day around the world to raise funds and build capital to fuel business growth, product development and profitability. It has become not just an accepted practice, but big business.
It’s also important to note that some of these altcoins have very small markets. They are targeted to a small audience only, and are released in very small numbers.
Notable Altcoins That Use Bitcoin’s DNA
You’ll notice many familiar names that tie into bitcoin’s DNA. These include:
- Ethereum (both classic and new Ether)
- Bitcoin Cash
What Are the Differences?
If all of these are merely riffs on bitcoin, what sets them apart from bitcoin? Is it just price? No, there are quite a few factors. For instance, let’s take litecoin. Created by a former Google programmer, litecoin is basically bitcoin, but it has less value, and it moves 2.5 times faster in terms of transaction speed. It also costs less per transaction.
A new block of litecoin is processed ever two and a half minutes, as well, rather than ever 10 minutes as with bitcoin. There’s also the fact that litecoin is designed for larger transactions, and is specifically targeted at merchants who need to bundle large volumes of small transactions for processing speed. Every other altcoin has something else that makes it unique.
These are just a few of the many 2018 cryptocurrencies built on the same platform as bitcoin. There will no doubt be more. We’re already well over 1,000 altcoins, and the number continues to climb. The real test will be see which ones remain viable over the long term.