As cryptocurrency continues to expand on its dreams of decentralisation, it’s hard to ignore the fact that alternative forms of cryptocurrency (cryptocurrency that isn’t bitcoin) have been receiving a lot of attention lately.

With some 14,000 altcoins that cohabit the cryptocurrency ecosystem, alternative cryptocurrency makes up about 60% of total market capitalisation – Bitcoin still takes up the other portion.

This however, doesn’t negate the possibility of altcoins’ potential, especially with all the attention these other forms of cryptocurrencies have been receiving.

Understanding the buzz

There’s no doubt that the altcoin hype is being noticed by many cryptocurrency enthusiasts and even its detractors for the recent developments in the space.

With so many different discussions happening within each cryptocurrency it’s easier to interpret the hype by fundamentally understanding two things:

• Altcoins are cryptocurrencies that provide users with options to choose from.
• Altcoins implement different forms of blockchain technology.

When compared to when Bitcoin was, back in the zeitgeist, it is no surprise that alternatives have arrived.

The growth potential of these forms of cryptocurrency have provided an amazing opportunity: a prime example of this would be the performance of Ethereum which increased about 500% since just last year.

Some may even argue that the grandfather of all cryptocurrencies, Bitcoin, is somehow now overhyped. Like many products and services out there; we always want and like more choices.

Alternatives that provide an alternative

More so, alternative cryptocurrency provides an alternative to the many other types of investments that are available in the market, just like Bitcoin has.

Altcoins have gained hype due to the nature of their features – each altcoin having its own use.

For instance, Ethereum doesn’t just function as a cryptocurrency but allows smart contracts to be built upon it and Litecoin possesses the ability to carry out faster and cheaper transactions.

Therefore, the individual investor has plenty of cryptocurrency choices to choose from, at a wide variety of prices.

Additionally, most alternative cryptocurrencies use open-source technology – codes that are publicly accessible – to continue in their refinement processes, through the ability of passionate communities of developers.

Alt about the application

Full pun intended! The applications of cryptocurrency have developed far beyond what bitcoin has had to offer.

As the altcoin market continues to grow, so have its applications. Alternate cryptocurrency has established multiple uses and it continues to do so with the most recent developments.

For example, the rise of non-fungible tokens (NFTs) unlocked financial opportunities for creators, cryptocurrency enthusiasts and even corporate giants.

As more people poured in to experience the buying and selling of NFTs, the cryptocurrency market began to expand, primarily Ethereum which the majority of NFTs live on.

Subsequently, as NFTs on Ethereum began to rise, other cryptocurrencies like Solana (SOL) joined in – allowing NFTs to be created and traded on their blockchains.

With thriving communities in the NFT space, cryptocurrency has extended an arm into the world of profile picture collections, artworks and even games.

The explosive popularity of the blockchain play-to-earn game ‘Axie Infinity’ even provided monthly incomes for individuals who embraced the daunting but rather fun Pokemon-inspired game, with players earning tokens that could be traded on in cryptocurrency exchanges for, yes, actual money.

A survey carried out by blockchain platform Stratis revealed that among 197 game developers in both the US and the UK, 58% of respondents are beginning to use blockchain technology, while 47% have already incorporated NFTs into their games

Apart from games, the metaverse is also yet another pathway for cryptocurrency to become more accessible.

Not to be confused with Facebook’s recent rebranding to ‘Meta’, the metaverse is the forefront of the all-encompassing Web 3.0 that will revolutionise the ways of the internet.

With virtual and augmented reality being focused on, the metaverse will also include a digital economy with the possibility of cryptocurrency being used as currencies.

According to Bank of America strategist, Haim Israel, the metaverse will be a massive opportunity for the cryptocurrency space, the idea being that cryptocurrency will go hand-in-hand with blockchain technology that will underpin some of the new virtually created worlds.

There’s no disputing that these aspects of cryptocurrency are in the works with developments being made each day. With alternative cryptocurrency applications being crafted and refined, the potential investor has many choices.

If not, investors can simply choose to buy and hold the cryptocurrency of their choice. However, one should do their own research and strive to understand the markets as it will be beneficial when making a choice.

Handling the perils

Though altcoins provide a multitude of opportunities, there still lies many ways one can become confused or lost when navigating through the cryptocurrency space. It is important to note that not all alternative cryptocurrencies will see price increases like Bitcoin.

Being realistic with your cryptocurrency expectations will aid in better decision making. It is also crucial not to buy into FOMO – the “fear of missing out” – a term commonly used in the cryptocurrency space to describe an individual who acts on impulse when buying or selling a cryptocurrency due to sudden fluctuations.

Likewise, the cryptocurrency ecosystem is still maturing and there are no guarantees of profits in the space.

More so, alternative cryptocurrencies are usually more volatile than Bitcoin. Potential investors may need to learn the ins and outs when buying an alternative cryptocurrency as well as keep track of the altcoin’s performance and its developments in the market.

The alt way

In essence, the alternative cryptocurrency sphere is filled with endless possibilities.

From its play-to-earn games to inexpensive investments all the way to currencies in virtual reality, the potential of these altcoins is limitless.

Nonetheless it is paramount for one to navigate through the risks wisely along with having realistic expectations. It is also important for individuals to invest only what they can afford to lose.

Currently, there are five cryptocurrencies – four being altcoins – that are approved by the Malaysian Securities Commission.

These are Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Bitcoin Cash (BCH) and Litecoin (LTC), all of which are available on Luno’s platform.

As the leading regulated digital assets platform, Luno offers a safe and secured platform to start your cryptocurrency investment journey.