{"id":1356,"date":"2022-01-24T00:22:30","date_gmt":"2022-01-24T00:22:30","guid":{"rendered":"https:\/\/www.cryptoheretostay.com\/?p=1356"},"modified":"2022-01-24T00:22:31","modified_gmt":"2022-01-24T00:22:31","slug":"when-and-why-did-the-word-altcoin-lose-its-relevance","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=1356","title":{"rendered":"When and why did the word \u2018altcoin\u2019 lose its relevance?"},"content":{"rendered":"<script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script>\n<p>All cryptocurrencies other than Bitcoin (BTC) were first described as altcoins for a single reason: There was a rise of projects that copied and pasted Bitcoin\u2019s source code. The cryptocurrencies in the early stages weren\u2019t unique enough to have a distinctive term, so \u201caltcoin\u201d (alternative coins) best fit their description. The community, at that point, didn\u2019t put too much thought into other cryptocurrencies due to Bitcoin\u2019s potential advancement \u2014 its future price growth, use cases, mainstream adoption, etc. It was the leading head in crypto.<\/p>\n<p>But things changed when people caught onto Ethereum\u2019s smart contract platform, as it can produce \u201csmart contract tokens\u201d \u2014 cryptocurrencies with the ability to perform intelligent tasks autonomously.<\/p>\n<p>This led the community to distinguish altcoins from tokens. Altcoins were now coins that had their own blockchain, and tokens were defined as cryptocurrencies created on smart contract platforms. The other factor now at work is that there are many blockchain projects that are scaling rapidly and decreasing Bitcoin\u2019s dominance.<\/p>\n<p>The community started noticing weaknesses in Bitcoin\u2019s correlation to other coins as other interesting new projects popped up, which provoked the crypto world to rethink how it sees cryptocurrencies. <\/p>\n<p>Now, every altcoin distinguishes itself on the market by offering a unique set of features related to things such as transaction management, scripting language, mining mechanisms and consensus algorithms. Although altcoins\u2019 superior features may outperform Bitcoin in one way or another, their value is still completely dependent on Bitcoin\u2019s market capitalization.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Where does the future of DeFi belong: Ethereum or Bitcoin? Experts answer<\/em><\/strong><\/p>\n<p>The community started to envision a world where various cryptocurrencies, not just Bitcoin, can disrupt the world. Now, with Ether\u2019s (ETH) growing dominance in the market, it\u2019s clear that Ethereum is the leader of crypto innovation. A large percentage of tokens today are Ethereum ERC-20 smart contracts, so the ways token minters classify their projects are easily normalized in the community.<\/p>\n<h2>Ethereum\u2019s role in crypto classifications <\/h2>\n<p>Ethereum\u2019s ecosystem is responsible for every crypto advancement and for mainstream interest, starting with initial coin offerings (ICOs) \u2014 which disrupted the initial public offering model by allowing anyone to buy a project\u2019s coin at launch. The attention from ICOs led to many use cases for ERC-20 tokens, with developers making their next cryptocurrency an Ethereum-based token and crypto users having an incentive to learn more about the tech. With a wide variety of ERC-20 tokens, our human nature must intervene to categorize and associate things.<\/p>\n<p>The term \u201caltcoin\u201d is no longer an acceptable way to define a project, as it\u2019s ambiguous \u2014 especially now with decentralized finance (DeFi). People want to know what type of coin it is, whether it be a staking coin, liquidity mining coin, crypto derivative, stablecoin, utility token, etc. They\u2019re aware that cryptocurrencies do much more than send and receive payments.<\/p>\n<h2>\u201cMeme tokens\u201d have entered into the crypto vocabulary, too <\/h2>\n<p>\u201cMeme token\u201d is a term most crypto users are familiar with due to Elon Musk tweeting to the world about Dogecoin (DOGE). But the crypto community had to make the distinction between tokens and meme tokens, as cryptocurrencies are capable of highly intellectual activity. Tokens based on social media content could potentially affect how the crypto sector is perceived, so a further classification had to be established.<\/p>\n<p>The rise of nonfungible tokens (NFTs) proved that the crypto community is ready to onboard and learn about new definitions. Imagine if NFTs were described as altcoins? By definition, they technically are, but there\u2019s so much that NFTs can do that demonstrates their difference. The community acknowledges that NFTs are ERC-721 tokens and recognizes the capabilities they possess. For starters, they\u2019re structured to make cryptocurrencies unique, with no two tokens sharing the same value.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>DeFi and Web 3.0: Unleashing creative juices with decentralized finance<\/em><\/strong><\/p>\n<p>\u201cGameFi\u201d (gaming DeFi) is another term that was added to the crypto dictionary. It deals with merging blockchain technology with NFTs, liquidity mining and other DeFi protocols. The result is games where people can earn real crypto and trade assets. GameFi is still new, so there\u2019s a chance that something trendy will come into existence and result in further classifications within the space.<\/p>\n<h2>The crypto community is getting smarter<\/h2>\n<p>The crypto community\u2019s collective understanding of the space is improving rapidly. Content creators, influencers and YouTubers are also good at converting complex jargon into easy-to-digest information. The community recognizes that correctly classifying cryptocurrencies increases the chances of finding good new projects early. For example, telling someone that a revolutionary NFT is just an altcoin will influence their first impression and possibly give the NFT less worth.<\/p>\n<p>Classifying cryptocurrencies helps with comparing them. To effectively compare cryptocurrencies, you must know what they are and whether others are doing the same thing. That\u2019s why you can\u2019t compare Dash to something like ADA \u2014 one is a payment cryptocurrency, while the other is the utility token of a proof-of-stake smart contract platform. <\/p>\n<p>Another argument for the collapse of the classification of Bitcoin vs. altcoins is the varying correlations between BTC and other coins. While the correlation is high within some pairs, others demonstrate weaker dependence on each other. For instance, ADA and XRP show a lower correlation with other digital assets, not to mention that stablecoins such as Tether (USDT) show negative correlations.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Bull or bear market, creators are diving headfirst into crypto<\/em><\/strong><\/p>\n<p>Classifications also help with diversification. You can have your crypto distributed between several coins, but the phrase \u201cdon\u2019t put all your eggs all in one basket\u201d can apply to you if all your coins are under the same classification.<\/p>\n<p>Although a growing number of new crypto concepts are emerging, we can still put them all \u2014 DeFi, GameFi, NFTs and meme tokens \u2014 under the umbrella of altcoins. From the traders\u2019 perspective, many believe that altcoins will have a larger return in the future, though maybe there is a weaker consensus than there is with Bitcoin, for now.<\/p>\n<p>As a Bitcoin maximalist and the CEO of a crypto exchange, I\u2019m happy to see more classifications arising, as the industry can hardly achieve mass adoption with just Bitcoin.<\/p>\n<p class=\"post-content__disclaimer\"><em>This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.<\/em><\/p>\n<p class=\"post-content__disclaimer\"><em>The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<p><strong>Johnny Lyu<\/strong> is the CEO of KuCoin, one of the largest cryptocurrency exchanges, which was launched in 2017. Before joining KuCoin, he had accumulated abundant experience in the e-commerce, auto and luxury industries.<\/p>\n<p><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/cointelegraph.com\/news\/when-and-why-did-the-word-altcoin-lose-its-relevance\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>All cryptocurrencies other than Bitcoin (BTC) were first described as altcoins for a single reason: There was a rise of projects that copied and pasted Bitcoin\u2019s source code. The cryptocurrencies in the early stages weren\u2019t unique enough to have a distinctive term, so \u201caltcoin\u201d (alternative coins) best fit their description. The community, at that point, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1357,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[2],"tags":[],"class_list":["post-1356","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-news"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/1356","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1356"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/1356\/revisions"}],"predecessor-version":[{"id":1358,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/1356\/revisions\/1358"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/1357"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1356"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1356"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1356"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}