This 'Altcoin' gained 1,300 % in 2021. So what is this cryptocurrency segment?

WION Web Team
NEW DELHIUpdated: Dec 31, 2021, 03:03 PM IST
main img

Representations of cryptocurrencies Bitcoin, Ethereum, DogeCoin, Ripple, and Litecoin are seen in front of a displayed Binance logo in this illustration taken, June 28, 2021. Photograph:(Reuters)

Story highlights

The cryptocurrency industry had huge upheavals in 2021, with older cryptos such as Bitcoin and Ether succumbing to upstart tokens, often known as altcoins, that promised considerably greater investment security and higher profits.

Binance Coin, or BNB, surpassed its two larger rivals, Bitcoin and Ether, among the three largest digital assets by market capitalization.

With a gain of 1,344 per cent, Binance Coin (BNB) has outperformed the three largest cryptos by market capitalization, while the Binance Smart Chain ecosystem has witnessed enormous growth in 2021, stealing some of Ethereum's market share.

In comparison, market leader Bitcoin grew by 65%, while Ether, the second-largest token, grew by 408%. 

The old guard of cryptocurrencies has lost ground to tokens with higher returns this year.

The tendency is expected to continue, according to researchers.

World Business Watch: Britain bans Binance's UK operations in latest cryptocurrency crackdown

What is Altcoin, how is it different from Bitcoin?

Alternative digital assets, such as a coin or token that is not Bitcoin, are referred to as altcoins.

This terminology stems from the notion that Bitcoin is the first cryptocurrency, and all others are "alternative" or "alternative" coins.

The word "altcoin" is also loosely applied to digital assets that are officially "tokens" rather than coins.

The ERC-20 tokens, which run on the Ethereum blockchain, are the most well-known instances. 

More than 2,000 alternative cryptocurrencies have been implemented since the launch of Bitcoin in 2008.

Through a process known as Hard Fork, many of these altcoins were formed as modified copies of Bitcoin.

Despite some similarities, each altcoin serves a distinct purpose. 

(With inputs from agencies)