Every other cryptocurrency aside from Bitcoin were initially called altcoins for a sole reason – Crypto projects launched at that period copied and used Bitcoin’s source code. At the early stages, there was nothing unique about other crypto coins to give them a distinct term. Therefore, bestforexbrokeraustralia.com seemed to be the best description.
Furthermore, in the early stages, the general crypto community gave other crypto projects little attention. The community was more focused on Bitcoin’s potential, its tech, future price, mainstream adoption, use cases, and so on. Bitcoin was the primary focus and leading head in the crypto space.
However, things gradually began to change with Ethereum’s smart contract platform. People began to catch up with producing smart contract tokens and their ability to autonomously carry out intelligent tasks. This eventually led the community to start differentiating between altcoins and tokens.
Altcoins finally evolved to be coins with their own blockchain and tokens were described as digital coins created on smart contract platforms. Presently, each altcoin now differentiates itself by providing distinct sets of features like consensus algorithms, mining mechanisms, and so on.
Since the introduction of the smart contract platform through Ethereum, the focus of the community jas changed. The bigger picture now entails a world where various digital coins, Bitcoin included, disrupt the world as we know it. In fact, Ethereum’s dominance seems to be growing thanks to its massive crypto innovations
Ethereum’s role in crypto classifications
Many will agree that the mainstream interest and the crypto advancement we have today is courtesy of Ethereum’s ecosystem. The movement started with ICOs (Initial Coin Offerings) which disrupted the conventional model of the public offering. ICOs allowed anyone to buy into any project and its corresponding coin at launch.
With so much attention created by ICOs, developers were able to find more use cases for ERC-20 tokens. Developers continued to build Ethereum-based projects while crypto users enjoy more incentives to learn about the growing tech. The need to create has now led to a wide range of
LRC-20 tokens, and given our human nature, we found the need to associate and categorize things.
The term “altcoin” now seems outdated and inadequate way to define projects given the ambiguity of the crypto space. The introduction of decentralized finance (DeFi) also further made things complex. Now people are interested in knowing what type of coin it is. Is it a crypto derivative, stablecoin, staking coin, utility token, and so on? Meme tokens also joined the list!
That’s not all, the explosion of nonfungible tokens (NFTs) into the mainstream proved the crypto community needs new definitions. It would be absurd to call NFTs “altcoin” right? Even though by definition they are, there’s so much more to NFTs than being labeled as altcoins.
Another term recently added to the crypto dictionary is “GameFi” (gaming Deri). GameFi basically dealt with combining blockchain tech with liquidity mining, NFTs, and various Defi protocols. This has resulted in the creation of games where people earn digital coins and trade assets. Clearly, GameFi is still new, so more should be expected.
The crypto community is getting smarter
The collective understanding of the crypto community has considerably improved over the years. YouTubers, content creators, and influencers have been helping to translate complex jargon into simple content. The community has realized that proper classification and definitions will improve the chances of finding good projects and allure individuals to join the crypto wagon.
Another argument brought forward for the Bitcoin vs. altcoins losing relevance is the differing correlations between Bitcoin and other digital coins. Even though the correlation is high within some crypto pairs, others share a very weak dependence on each other. For example, XRP and ADA display a lower correlation with other crypto assets. Their correlation with stablecoins like Tether (USDT) in fact shows a negative relationship.
While the number of latest crypto concepts continue to emerge, recent classifications such as GameFi, meme tokens, NFTs, and all-Defi can still be grouped under the altcoin umbrella. Many traders have analyzed that most of these altcoins will have massive returns in the future. However, the consensus about these altcoins seems to be weaker than there is with Bitcoin.