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Bitcoin, altcoins, stablecoins, memecoins and shitcoins.....oh my!




While journeying through the world of crypto you may have come across terms like altcoin, stablecoin or memecoins but what do they mean and what is their purpose?


The first is Bitcoin and its main purpose is to act as a store of value. Bitcoin is the oldest and original cryptocurrency. At the time of writing this article Bitcoin makes up around 44% of the entire crypto market and is valued at just over $1tn. If investing in crypto for the first time Bitcoin is a good place to start.


Coins that are not Bitcoin are referred to as "Altcoins" which is a term derived from merging the words "Alternative" and "Coin" together. Basically anything that isn't Bitcoin is an Altcoin.


The top altcoins are Ethereum (ETH), Cardano (ADA), Binance (BNB), XRP from Ripple, Solana (SOL) and Polkadot (DOT). These altcoins serve a variety of purposes; Ethereum and Cardano provide the framework for an entire blockchain infrastructure that runs smart contracts and digital apps (dApps). XRP from Ripple Labs is designed to be a digital payments network similar to the SWIFT system that many banks use today. Polkadot is designed to enable cross blockchain transactions. These are just some examples but it should help you understand that these altcoins have multiple uses and are not just a coin to buy and sell.


In fact it really important to understand what the purpose of the coin you are investing in is. If it solves real world problems then there is genuine value to the coin and it is likely to increase in value over time. Whereas altcoins that offer little or no value wot last in the long term.


The next type of coin is a Stablecoin. A stablecoin is a type of altcoin that's value is pegged to a currency (in many cases USD). Whereas altcoins and Bitcoin can whipsaw in value a stablecoin doesn't, as it acts just the same way as the US dollar for example. The most common stablecoins are USDT (Tether), USDC (USD Coin), BUSD (Binance USD), Dai and TerraUSD. All these stablecoins are pegged 1 to 1 with the US Dollar. The real benefit of this is that they don't get impacted by the volatility that you see with other coins like Bitcoin and Ethereum.


Many Crypto investors hold a portion of their portfolio in stablecoins to reduce the impact of volatility in the markets.


Next up are memecoins.


The most well known memecoins are Dogecoin and Shiba Inu. Dogecoin is the original meme coin: It was created as a joke based on a meme back in 2013 abut then rose to fame after Elon Musk began tweeting about the cryptocurrency. The thing about these memecoins is that they have no real world purpose so I believe ultimately will have no long value. Personally I wouldn't touch them, as my own crypto investment strategy is based on investing in cryptos that solve real world problems.


Lastly there are Shitcoins. These coins that are essentially useless and have no value. They tend to get hyped by an influencer or celebrity so the prices rise by then sink quickly after people have taken their money. Examples of these types are Troll coin, Tump coin, Putin Coin and Penis coin to name but a few,

Best to stay well clear of any of these types of coins.



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