In my series about Steem and cryptos, I have spoken in my various blogs about what you can do with your Steem. One of those was trade other crypto currencies. If you watch the price of these currencies your first thought is why is it so volatile. This may seem very risky to play with, but if you play right you can make big multiples.
Bitcoin - BTC
This is the gold standard of crypto. Other tokens move in relation to BTC (Its exchange tag). It is the daddy coin, the coin to start it all. It is also by far the most valuable coin per unit and market cap. For the record, market cap is simply the number of coins in circulation x price per coin. Until about 2016, BTC was nearly 90% of the complete crypto market cap. Even today it still has the largest share, but with tokens such as Ether, Ripple and some others, it has lost some of that position and now sit around the 50% mark. Still that means that half the value in crypto is held in BTC.
This will keep going down, and while BTC maximalists believe there can only be one, and essentially see all other coins as a waste of time, BTC has some major challenges into the future. Two of these I believe will cause other coins to join it in terms of high market cap. 1) it is slow. Because of how transactions are approved, it can take minutes to complete a bitcoin payment. Fine if you are buying a house, not so good if you use it for beer ... you may become an alcoholic with that wait time. 2) transaction cost has been increasing. The average cost has been as high as US$9 this year and sits around the $7 mark.
If you would like to see my source of information please have a look at:
BTC Market Cap
BTC transaction costs
It now is evident that there will be other coins, ones better suited to transactional volumes needed in the real world, and with far lower transaction costs. While the BTC community has tried with Segwit and now with Segwit2x to make changes to the BTC blockchain to improve transactional speed, it really is a little like trying to polyfilla a dam that is cracking.
The other coins - ALT Coins
An Alt coin essentially derives from an ALTERNATIVE to BTC. That is any crypto coin that is not BTC is an Alt coin. There could be many more, but to date there have been more than 4500 coins minted. Source .
Do not get bamboozled though. Only about 25 % of these have any value. The most comprehensive source of this value, volumes and where they trade is on coinmarketcap.com. They list 1165 cois to date. More than half is junk, have no purpose and probably where scams or hair brained schemes where the developers tried to make a quick buck.
550 Coins have any kind of market cap (more than $100 000). But to take any coin seriously you need a market cap of at least $10m. Anything below this, even in new coins, will battle to get attention, and probably die. So in all of these coins you really only have 216 coins that matter.
Ether -ETH
The top 10 coins all have market cap of more than 1 billion USD. ETH is the second largest by far, with a market cap of around $30 Billion USD, about 1/3 of BTC and growing. The unit price is much lower but there are more coins in circulation. The ICO bubble of the last few years added great value to ETH and essentially had it pass the other traditional large ALT coins such as Litecoin, Ripple, Dash by a large margin. Many token sales run on the ERC20 platform that is ETH based, and ETH has the largest community of projects based on its blockchain and coin.
This world is changing vast, and I believe purpose built coins that can reach VISA Card like transaction speeds at a fraction of the cost is the future. With projects like EOS out there driving to this, I believe this journey has just started, even if we will see more governance and control of the space. Blockchain is the tech of the future, and could just level the playing field across the world.