Altcoin: defined in CryptoCurrency

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Altcoin: Defined

About AltCoin:

• Altcoin is a cryptocurrency with exception for bitcoin, because it was the founding currency and all other cryptocurrency coins that are defined as alternative-coins. 
• Altcoin is a combination of two words: “alternative bitcoin” or “alternative coin”. There are over 1,500 altcoins with many more planned for release.
• Altcoins are the alternative cryptocurrencies launched after the success of Bitcoin.
• The AltCoin project themselves as better substitutes to Bitcoin and the citizens desire a decentralized bank, and zero-no transparency.
• Many altcoins target any perceived limitations that Bitcoin offers with newer security and decentralized competitive advantages.
• The term 'altcoins' means all cryptocurrencies which are not Bitcoin, and there are hundreds of altcoins.

BREAKING DOWN 'Altcoin':

• "Altcoin" is a combination of two words, "alt" and "coin"; alt signifying 'alternative' and coin signifying 'cryptocurrency.'
• AltCoins imply a category of cryptocurrency that is alternative to the digital currency Bitcoin.
• Countless successful story of Bitcoin investors making it rich have given birth to AltCoins.
• Mmany peer-to-peer digital AltCoin currencies attempting to improve where BitCoin currency is lacking in decentralization, privacy, and slow transaction time.
• Bitcoin was the first cryptocurrency, and remains most popular.
• Bitcoin-Coin is now only one of hundreds of cryptocurrencies, which all seek to improve upon Bitcoin in various ways.
• Many of the altcoins are built up on the basic framework provided by Bitcoin.
• Most altcoins are peer-to-peer, involve a mining process by which users solve difficult problems to unlock blocks.
• AlCoins offer efficient and affordable ways to carry out transactions on the web.
• Altcoins vary widely from each other.
• Altocoins differ themselves from bitcoin with a range of procedural variations.
• CryptoTraders use proof-of-work algorithms.
• The earliest notable altcoin, Namecoin.
• Namecoin was based on the Bitcoin code.
• The Namecoin used the same proof-of-work algorithm; like Bitcoin.
• Namecoin is limited to 21 million coins.

Namecoin Introduced in April 2011:

• This Namecoin primarily diverged from Bitcoin by making user domains less visible, private, allowing users to register and mine using their own .bit domains.
• Namecoin intended to increase anonymity and censorship resistance.
• Current leading examples of altcoin include Litecoin, Dogecoin, Ethereum, and Ripple.
• Litecoin is seen as the closest competitor to Bitcoin.
• Litecoin was introduced in October 2011, shortly after Namecode, Litecoin was branded as the 'silver to Bitcoin's gold.'
• Litecoin, while fundamentally similar in code and functionality to Bitcoin, Litecoin differs from Bitcoin in several essential ways.
• Litecoin allows mining transactions to be approved every 2 1/2 minutes, to Bitcoins 10 minutes.
• Litecoin also allows for a total of 84 million coins to be created - exactly 4 times higher than Bitcoin's, and Namecon's 21 million coins.
• Litecoin also uses a different proof-of-work algorithm than Bitcoin the scrypt.
• Litecoin uses a sequential function that is much more memory-hard than most proof-of-work algorithms.
• Litecoin is supposed to make it much more difficult to generate than bitcoins, as increasing memory space required for the proof-of-work algorithm reduces the mining speed, and makes it harder for any one user or group of users to dominate the blockchain.
• As of May 2018 there are more than 1500 Altcoin cryptocurrencies available over the internet all except one of which are altcoins.
• New altcoin cryptocurrencies can be created at any time.
• There are many older cryptocurrencies which are no longer on the market.

Different proof-of-work algorithm:

• The Proof-Of-Work-(PoW) algorithm used for mining Bitcoin is SHA2.
• It was chosen because it is fast to verify and has been critically analyzed.
• The SHA2 cryptography is used by ASICs developers and ASIC's pitch is that there is a much smaller risk of centralization, but this is not at all true; actually the opposite.

These mining algorithms are used in different altcoins:

1. Scrypt proof of work.
2. Combination of hashing algorithms in series (e.g. X11).
3. Combination of hashing algorithms in parallel (e.g. Myriad algorithm).

• The problem with having an algorithm that is "easy to mine with" as this is referring to the ability to CPU or GPU mine profitably.
• This algorithm defines; mining should be harder for people who are poor not being able to afford more expensive mining equipment.
• The excuse is to secure the network, but this is false, and in fact only allows the wealthiest to get richer only.
• A higher peasant barrier in order to have increases profits.
• Tthe time barrier within the first group to create ASICs will monopolize the market, and then and again those who large sums of cash, the wealthy.

Proof Of Stake:

• In Proof of Stake-(POS), instead of sacrificing energy to mine a block, a user must prove they own a certain amount of the cryptocurrency to generate a block.
• The more stake you own, the more likely you are to generate a block. In theory, this should prevent users from creating forks because it will devalue their stake and it should save a lot of energy.
• Proof of Stake sounds like a good idea, but ironically, there is the "Nothing at Stake" problem.
• Reason is, POS, mining Bitcoin is costly, it is not smart to waste your energy on a fork that won't earn you any money, however with Proof of Stake, it is free to mine a fork.

Application Built on Top of a Cryptocurrency:

• Bitcoin is a similar to HTTP.
• Bitcoin is an application layer protocol and tools can be built on it (like websites can be built on HTTP).
• There is a class of cryptocurrencies that promise features like casino websites and exchanges and anonymity protocols to be built on top of them.
• Protocol HTTPS is an encrypted version of HTTP, therefore it is useful and necessary.
• Creating apps, such as "DarkSend", programmersdo not make a new protocol called "Darkcoin".
• This is synonymous to making an HTTPS alternative (eg. HTTPSX) for your new encrypted chat website and not adding any new security or functionality to HTTPSX.
• This is a new class of altcoin that is targeted at a certain demographic.

Useful Cryptocurrencies:

• A cryptocurrency is useful if it accomplishes a task that Bitcoin cannot.
• Acting as a keystore for things like decentralized domain registration.
• Having demmurage or some other economic system that is one of the prohibited changes.
• Allowing creation of and transmission of digital assets. 

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