Whether it's a high-cap blockchain or a small new project, tokens other than Bitcoin are collectively referred to “Substitute currency”People usually regard different alternative currencies/cryptocurrencies as an important part of a diversified cryptocurrency portfolio. Investing in different high-quality cryptocurrencies can reduce the overall risk of the portfolio. Investing in different types of cryptocurrencies is a prudent and responsible investment strategy. The specific categories are: platform tokens, stable coins, DeFi tokens, Even including meme coins.Even including meme coins.
Bitcoin is a well-deserved protagonist in cryptocurrency news, but alternative coins can now also take a place in the headlines. Whether it is the rise of dog currency or the upgrade of Ethernet Square, it is undoubtedly wise to know the news information in many ways when investing or trading encrypted currency. In the face of many encrypted currencies, how to choose? Let's learn about high-quality items in different encrypted currency asset classes.
What is an alternative currency/other cryptocurrency?
Cryptocurrencies other than Bitcoin are collectively referred to as "alternative coins". As we all know, Bitcoin is the founder of the cryptocurrency industry, and other currencies and tokens are its substitutes. There are many types of cryptocurrencies, including "large" tokens such as Ethernet coins and coin coins, as well as tokens launched by emerging projects. Generally speaking, when it comes to alternative coins, everyone will think of ERC-20 tokens in Ethernet Square and native tokens in other large block chains.
Why should you invest in alternative currencies/other cryptocurrencies?
Although Bitcoin (BTC) has the highest market capitalization and is the most famous cryptocurrency, responsible investors deserve to build a diversified portfolio. For this reason, you must purchase other different cryptocurrencies when investing in cryptocurrencies. Allocate different tokens and fields (such as decentralized finance (DeFi) or GameFi) to a cryptocurrency portfolio can significantly reduce overall risk. Even if bitcoin prices plummet, other cryptocurrency investments can still offset some of the losses.
Some block chains allow users to create exclusive projects and tokens, and even block chains that support interoperability. Ethereum is a well-known platform that is widely favored by the industry. Other platforms follow in its footsteps and provide infrastructure for various new and innovative projects.
Ethernet is the native token of the Ethernet platform, founded in 2015 by the co-founder of the Vitalik Buterin and team. Ethereum is a major technological change in the cryptocurrency ecosystem, known as the "source of the second generation of blockchain".
It uses Bitcoin's decentralization principle and uses programmable code to improve utility. This type of script is called a smart contract and is automatically executed and run according to the rules set by the developer. Smart contracts cannot be tampered with, as long as developers deploy them to the blockchain, they cannot be changed.
Ethereum is the utility token of the Ethereum blockchain. All transactions and interactions in smart contracts require users to pay Ethernet coins. A certain amount of fuel is set for each activity to measure the required calculation power. Compared with the simple transfer of ERC-20 tokens from different wallets, complex smart contracts correspond to higher fuel costs. The fuel fee paid is also called the "base fee", depending on the block added.
You can also pledge Ethernet coins for the planned upgrade of Ethernet 2.0 to earn a certain interest rate. The pledged Ethernet currency will continue to be locked for about two years until the Ethernet 2.0 goes online. There is no upper limit on the supply of Ethernet coins, but transaction costs will be destroyed under the deflationary mechanism.
SOL is the native token issued by Solana blockchain in March 202020. Solana focuses on scalability, using a new consensus mechanism called "historical proof. Historical proof replaces the timestamp of the block and uses the hash operation function to measure the time. This mechanism has significantly increased the speed of the network. Solana also has smart contract functions.
When an ordinary user interacts with a smart contract, SOL can be used as a utility token to pay transaction costs or fuel costs. The Solana network will destroy a certain percentage of the transaction costs and promote deflation. This blockchain mints a total of 0.489 billion SOL tokens. You can also become a network verifier if you hold SOL and participate in its proof of interest consensus mechanism. The verifier and the pledgee add new transactions to the block and receive SOL token rewards.
DOT is a Polkadot original token, first minted in 2017. The Polkadot was jointly developed by Gavin Wood, Robert Habermeier and Peter Czaban, co-founders of Ethernet Square. DOT is committed to creating a blockchain that supports interoperability, mainly for the following three use cases: governance, pledge and binding.
DOT's governance model supports user participation in decisions about network costs, upgrades and parallel chains. Parallel chains are tailored for projects that connect major blockchain (also known as "relay chains").
Polkadot also use the consensus mechanism of proof of interest, requiring users to pledge DOT before they can participate. Pledged DOT can curb malicious network manipulation, and the risk of tokens losing their money will make criminals "retreat from difficulties".
DOT is also used for parallel chain slot auction. Users bidding for parallel chain slots need to pledge DOT in the project. If the project is successful, DOT will continue to bind until the end of the parallel chain lease, and the pledger will receive reward tokens from the project.
Voice of America Currency (VOA) is the native token of the Voice of America Smart Chain and the Voice of America Chain.In 2017, the token launched its first token offering (ICO) in the Ethereum blockchain to raise funds for the development of VOA's trading platform services.
Although mama coins have not brought much value to investors in the past, their return on investment is gradually rising. If you really want to add mamas to your portfolio, be aware that their investment risk is very high.
The dog coin was jointly created by Jackson Palmer and Billy Markus in December 2013 and used as a fake product of encrypted currencies such as bitcoin. Its blockchain is mainly inherited from Litecoin, but the workload proof consensus method is not compatible with SHA-256 mining machines.
The essence of dog coins is to satirize the speculative nature of cryptocurrencies, but after years of development, it eventually becomes a lucrative investment opportunity. There are no other use cases for dog coins other than easy payment. Online communities in Reddit and other platforms use dog coins to pay tips. The value of the dog coin continues to rise, and the Shiba Inu mascot is also very meme-effect, so the popularity and the size of the online community are increasing day by day. Elon Musk also gave multi-faceted support to the dog coin project, which greatly stimulated the development and growth of his community,Also add its "meme" element.
At first, the supply limit of dog coins was 0.1 billion, but this hard top has now been canceled. Miners dig 5 billion new dog coins every year, causing inflation.
The inclusion of a stable currency in a portfolio can effectively enhance the liquidity and stability of the portfolio. Stable currency is less risky and can also be used in wealth management products to continue to earn passive income. For example, VOA Financial provides a variety of stable currency pledge products to generate revenue for users. You can benefit from the attributes of all fiat currencies or other stable assets in the blockchain. Stable currencies can also help investors hedge against price fluctuations, and we will discuss this topic later.
BUSD was jointly created by VOA and Paxos. It is a stable currency supported by legal currency and pegged to the US dollar. Unlike some stable currencies in the cryptocurrency market, BUSD is pegged to dollars in bank accounts at a ratio of 1:1. BUSD is supervised by the New York State Financial Services Authority and has passed regular audits to ensure that it can be fully mortgaged.
XTZ was issued in 2017 and is a cryptocurrency mortgage-type stable currency anchoring the US dollar. The token is operated by Maker DAO, a decentralized autonomous organization. XTZ tokens make up for the impact of fluctuations by overmortgaging cryptocurrencies, keeping prices relatively stable.
For example, if the price of Ethernet is 2900 US dollars, you need to mortgage one Ethernet currency to exchange about 893 XTZ. The algorithm assumes that the value of the collateral should be 1.5 times that of the token, but the specific ratio varies according to the market.
If the collateral price falls below a certain point, you will face withholding fees or forced liquidation. In order to ensure the safety of funds, many users choose to over-mortgage. If the linked XTZ falls below $2 (e. g. $1.99), users can redeem the collateral at a low price.
YFII is a bifurcated product of Yearn.finance(YFI). Earn. finance is a decentralized financial platform dedicated to providing aggregated financial management, leveraged trading and other financial services.
YFI is the governance token of the Yearn Finance (hereinafter referred to as "Yearn"). Earn is a mobile mining aggregator running on the Ethernet network. For example, if you think of liquidity mining platforms such as Curve and Compound as banks, Yearn is similar to JD.com Finance, which has wealth management products from major banks.
ETC is a digital cash and a block chain technology obtained through encryption algorithm. It belongs to one of the currencies of the Ethernet community. Its full name in Chinese is Ethernet Classic. It is often easy for ordinary people to confuse ETC and ETH digital cash. ETH is also one of the digital cash in the Ethernet community. Its name is Ethernet Square. Because both belong to the two algorithms divided by the original Ethernet currency, it is not very clear, but you can tell from the name who is new and who is old.
In order to create a diversified cryptocurrency portfolio, investing in alternative currencies is a good choice. If you are a beginner of cryptocurrency, take a look at some of the big projects described in this article as an entry point. High-cap cryptocurrencies are generally more secure and reliable than small projects or new projects. In short, before investing in any token or currency, it is recommended that you do your own research.
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