What are Altcoins and StableCoins: Pros and Cons (2022)

What is an altcoin?

Altcoin is a cryptocurrency which is an alternative to Bitcoin(BTC). Basically, any cryptocurrency which isn’t bitcoin is called an altcoin. Altcoins are made in order to compete in the crypto market with market leader Bitcoin. To trade altcoins we can use altcoin exchange or any other major cryptocurrency exchanges.

Talking about altcoins, We also need to know about one of the segments of altcoin which is called stable coin. Now, let’s understand more about stable coins.

What is a Stablecoin?

StableCoins are the altcoins whose work is to maintain the stability of the crypto market. From its name, stableCoin is made in order to have stability in the market for Safety. A stableCoin keeps its value constant in the market, regardless of market fluctuations.

A StableCoin’s market value can be pegged to any other asset. Therefore, they have no best StableCoins in the market and Usually they are pegged with US dollars. Algorithmically, StableCoin can be pegged to any other crypto. Tether(USDT) is considered as the first StableCoin and there are many more in the market.

Key Differences between Altcoins and StableCoins:

Altcoins and StableCoins have their differences in their functionality in the crypto space. Altcoins are extremely volatile in the market whereas, StableCoins are intended to provide stability in the market. StablCoins also have a fixed amount of cash reserves.

Altcoins enable access to Defi instruments which helps in faster transactions and lower fees compared to market leader Bitcoin. Due to the price volatility of altcoins, there can be High (ROI) on best altcoins for the early investors.

StableCoins can’t provide investors with high (ROI). Besides this, StableCoins has several advantages like users don’t have to on-ramp fiat currency and ability to code novel design improvements into the crypto token.