The Best Altcoins 2021
Bitcoin has become a household name for many people. But besides the largest cryptocurrency in the world, there are several thousand altcoins. Let’s now take a look at what exactly altcoins are, which types of them are the most promising and which are among the favorites.
What are Altcoins?
Basically, all cryptocurrencies except bitcoin are called altcoins. The name is derived from Alternative Coins. So other currencies. After all, the Bitcoin was the first cryptocurrency in 2009. According to coinmarketcap, there are currently more than 8,800 different currencies. You can certainly say that a large part of them is not usable and will not become established. If you want to trade with Altcoins, you need a reliable exchange like Bitfinex.
However, in the past it became apparent that Ethereum, for example, or Cardano and Binance Coin play a serious role on the crypto market. Currently, Bitcoin accounts for about 60 percent of the market capitalization of all cryptocurrencies. In the early years up to 2017, this dominance swung between about 80 percent and 95 percent. It was not until the ICO boom in 2017 that Bitcoin sustainably lost its dominance. It even sank to 33 percent market dominance until today, when it settled between about 55 percent and 70 percent. So Bitcoin represents more than half to even more than two-thirds of the total market of all cryptocurrencies. But the altcoins are increasingly nibbling away at this dominance. This now raises the question: should one invest in other cryptocurrencies besides Bitcoin? And which altcoins are suitable at all? And what are they for?
Categories of Altcoins
Not all cryptocurrencies are the same. They have completely different approaches and also completely different use cases. While Bitcoin is now primarily considered a digital commodity, a digital gold and thus a store of value, there are coins that represent networks, that are specifically only there for certain projects and all sorts of other use cases. We present the currently most important ones here.
- The networks
- The payment currencies
- NFT Coins
Of course, there are other categories and you can also classify the different currencies more arbitrarily. However, we see the above categories as promising and important at the moment, in addition to Bitcoin.
Cryptocurrencies like Ethereum, Cardano or even Binance Coin are a kind of platform. On this platform, other crypto projects can work, issue their own coins, conclude smart contracts and much more. These coins usually have a lot of use cases and are popular accordingly.
- Ethereum: Is the second most valuable blockchain in the world. The associated Ether token is needed for smart contracts, for many deposits in projects of the DeFi sector, for NFTs and many other applications. Currently, Ethereum wants to move from a proof-of-work to a proof-of-stake consensus. The update to ETH 2.0 will also allow Ether to be staked and thus earn interest on it.
- Cardano: Is one of the big winners in 2021, this cryptocurrency aims to offer similar applications to Ethereum with its ADA token. Cardano was launched by Ethereum co-founder Charles Hoskinson and aims to be newer and more modern with its technology. The final proof that Cardano is a very good platform is yet to come.
- Binance Coin: This coin is a bit more difficult to classify. Because on the one hand, it is a kind of asset and to be valued like a share of the crypto exchange Binance. But with the Binance Smart Chain, the BNB token also offers similar benefits as Ether or ADA.
The payment currencies
Originally, cryptos were once developed to be able to pay more digitally and easily. Today, they often offer quite a few different options. However, payment currencies still exist: these include Litecoin, ZCash, Monero in particular.
- Litecoin: Is one of the oldest cryptocurrencies and was founded back in 2011. Litecoin is based on the Bitcoin code, but is about four times faster. There are also four times as many coins – namely 84 million. Overall, Litecoin was developed more for payment.
- ZCash: With this cryptocurrency, people can send money. And they can do so anonymously. This is a big advantage over many other cryptos. Bitcoin, for example, is just pseudonymous. You don’t know who sent what, but the fact that something was sent is apparent and can always be assigned to certain addresses. ZCash wants to do that differently. Recently, however, this cryptocurrency dropped significantly in the ranking.
- Monero: Monero also wants to process payments easily, quickly and anonymously. It differs somewhat from ZCash in the technology, how the blockchain works. But at this point, it is first important to understand what Monero actually does. Monero currently seems to be somewhat more successful than ZCash at position 25.
Stablecoins are very different from other cryptocurrencies. This is because they are something like their own central bank in the crypto sector. For example, if you want to buy a Tether, you pay one dollar for it. This US dollar is deposited with Tether and you can get it back in exchange for the Tether. Stablecoins are always tied to a fixed value (usually US dollars) and do not increase in value as much as other cryptos. Some Stablecoins allow their owners to earn interest. Anyone who wants to invest in Stablecoins should take a closer look in each case. Because the topic is very complex and extensive, only a listing follows here:
- USD Coin
- Binance USD
The NFT Coins
When it comes to the best altcoins of 2021, the NFT coins cannot be missing, of course. Because the NFT hype reached a temporary peak in 2021. The abbreviation stands for Non Fungible Token. This means that each coin is unique. A Bitcoin is not fungible. Because whether I own a Bitcoin that was created in 2009 or one that was created in 2016 doesn’t matter. NFTs, however, are unique. At the same time, these NFTs can be anything: Digital trading card, digital artwork, or even digital game characters. Jack Dorsey sold his very first tweet as an NFT. But what can the individual coins do?
- Enjin Coin: This NFT coin from the company Enjin specializes mainly in the gaming market. It calls itself a social gaming platform and gamers and developers can buy and sell things with Enjin Coin.
- Decentraland: This cryptocurrency allows you to purchase properties on the platform of the same name. You can then design and resell these digital properties or stay there. Experienced hype when Atari announced a digital casino on Decentraland.
- FLOW: This platform is still a bit elusive. However, FLOW is also basically about creating a digital ecosystem for games and collectibles. To do this, the team is working with many well-known partners.
The DeFi Coins
DeFI coins are also likely to be called the best altcoins in 2021. DeFi stands for decentralized finance. The idea here is to be able to conduct all kinds of monetary transactions without a bank – i.e. directly from person to person.
- Uniswap: Made it into the top ten cryptocurrencies by market value after a strong run. Uniswap here is a platform where users can swap (exchange) their coins. This is because many coins, especially very many of the new cryptos – are not yet tradable on any or very few crypto exchanges. So Uniswap enables the exchange of coins. And is apparently currently successful with it.
- Aave: Is a project that allows users to borrow and lend crypto coins. With this, users can then either earn money or obtain liquidity. Aave is one of the most successful financial protocols in the DeFi sector.
- Avalanche: Is a platform. Here other DeFi projects can offer their services, here investors can buy and sell assets and much more. Avanlanche wants to become a smart contract platform.