All cryptocurrencies except Bitcoin (BTC) were first described as altcoins for one simple reason: there has been an increase in the number of projects copying and pasting the source code of Bitcoin. Cryptocurrencies in the early stages were not so unique as to have a distinct concept, so “altcoins” (altcoins) fit their description better. At the time, the community didn’t think much about other cryptocurrencies due to Bitcoin’s potential advancement – future price growth, use cases, mainstream adoption, etc. It was a pioneer in the cryptocurrency space.
But that all changed when people found the Ethereum smart contract platform because it could create “smart contract tokens” – cryptocurrencies that could perform smart tasks independently.
This has led the community to separate altcoins from tokens. Altcoins are now coins with their own blockchain, and tokens are defined as cryptocurrencies created on smart contract platforms. The second factor is that there are many blockchain projects that are rapidly expanding and reducing the dominance of Bitcoin.
The public has begun to notice the weaknesses in Bitcoin’s correlation with other currencies as interesting new projects have emerged that have prompted the cryptocurrency world to reconsider its attitude towards cryptocurrencies.
Now, every altcoin stands out in the market by offering a unique set of features related to things like transaction management, scripting language, mining engines, and consensus algorithms. While the superior properties of altcoins may be somewhat better than Bitcoin, their value still depends entirely on Bitcoin’s market cap.
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The community began to envision a world in which various cryptocurrencies, not just Bitcoin, could destroy the world. Now, with the increasing dominance of Ethereum (ETH) in the market, it is clear that Ethereum is a leader in crypto innovation. Today, a large proportion of the tokens are Ethereum ERC-20 smart contracts, so the ways in which token miners classify their projects are easily normalized in the community.
The Role of Ethereum in Crypto Rankings
The Ethereum ecosystem has been responsible for all the cryptocurrency growth and mainstream interest since Initial Coin Offerings (ICOs) smashed the first public offering model by allowing anyone to purchase the project’s coin at launch. Interest from ICOs has led to the use of ERC-20 tokens in many cases: developers have converted their next cryptocurrency into an Ethereum-based token, and cryptocurrency users are encouraged to learn more about the technology. With a variety of ERC-20 codes, our human nature must step in to classify and associate things.
The term “altcoin” is no longer an accepted way of defining a project because it is ambiguous, especially now with decentralized finance (DeFi). People want to know what type of coin it is, whether it is staking coin, cashback coin, derivative cryptocurrency, stablecoin, interest token, etc.
“Meme-tokens” have also entered cryptocurrency
“Meme token” is a term that most crypto users know because Elon Musk is writing to the world about Dogecoin (DOGE). But the crypto community had to distinguish between tokens and meme tokens, because cryptocurrencies are capable of very smart activities. Tokens based on social media content have the potential to influence the perception of the crypto sector, so an additional label had to be created.
The emergence of non-fungible tokens (NFTs) has demonstrated that the crypto community is ready to share and learn about new definitions. What if NFTs are described as alternative currencies? By definition, they are technically, but NFTs can do a lot that shows their difference. The community understands that NFTs are ERC-721 tokens and recognizes the features in them. First, they are designed in such a way that cryptocurrencies are unique, without two tokens having the same value.
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“GameFi” (Gaming DeFi) is another term added to the crypto vocabulary. It is about integrating blockchain technology with NFTs, liquidity recovery and other DeFi protocols. The result is games where people can earn real digital currencies and trade assets. GameFi is still new, so there’s a chance something trendy will emerge and lead to more ratings in the room.
The crypto community is getting smarter
The crypto community’s collective understanding of the space is rapidly improving. Creators, influencers, and YouTubers are also adept at translating complex jargon into easy-to-understand information.