itcoin spawned an entire market of alternative cryptocurrencies. Today there are more than 5,000 of these ‘altcoins’.
Altcoins can be a good way to diversify your crypto holdings, especially given the additional functionalities they offer.
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1. Ether (ETH)
Ether is Ethereum’s native token and the world’s second-biggest cryptocurrency. Ethereum is a global software platform that runs decentralised applications, smart contracts and financial transactions, as well as minting and storing Non-Fungible Tokens (NFTs).
Launched in 2015, ETH has amassed a market cap of over £144 billion as of July 26,2022. The crypto’s value peaked at £3,815 in August 2021, and each token is now worth £1,149.
2. Litecoin (LTC)
Litecoin was one of bitcoin’s earliest challengers when it launched back in 2011.
Litecoin uses a proof-of-work consensus mechanism like bitcoin, meaning new coins are minted to reward miners for processing transactions on its blockchain. However, Litecoin’s newer Scrypt algorithm makes transactions faster than bitcoin.
Litecoin peaked at £326 in May 2021. As of October 2022, one LTC is worth around £47.09.
3 Dogecoin (DOGE)
What began as a parody of cryptocurrencies quickly became the world’s biggest memecoin.
DOGE hit the exchanges in 2013 and used distributed ledger technology derived from Litecoin.
The memecoin peaked in value in May of 2021, reaching 46p. Much of DOGE’s positive price movements have followed backing from Tesla founder and entrepreneur Elon Musk. As of October 2022, however, DOGE’s value has fallen to around 5p.
4. Bitcoin Cash (BCH)
Bitcoin Cash was the result of a hard fork in the original bitcoin project in 2017. A breakaway group of contributors wanted to increase the size of blocks in Bitcoin’s blockchain to contain more transactions.
Bitcoin Cash has the same proof of work consensus mechanism and the same hard cap of 21 million coins as Bitcoin. As of 3 October 2022, one Bitcoin Cash token is worth £102.
5. Tether (USDT)
Launched in 2017, Tether is one of around 200 stablecoins.
A stablecoin is tied to fiat currency, in this case, the US dollar. For every Tether token issued, its creators keep a dollar in reserve, and for every $1 cashed out, one Tether coin is destroyed. In theory a Tether token retains a value of around $1 (89p Sterling). Its stability makes Tether a good option for transferring value between exchanges, since Tether holdings are more likely to retain a stable value than other, more volatile, coins.