Since Bitcoin network became popular, it may experience congestion on transactions and due to greater fees incurred, people may have thought of an alternative to escape these issues. Altcoins have been recommended to use by some cryptocurrency supporters when transaction traffic reaches its highest point in order to save money for the fees and speed up deals for Bitcoin miner. But using altcoins alternatively doesn’t really make you save some money but may give you more difficulty than you expected.
Wait or Use Altcoins?
We can hear several complaints with reagrds to the increasing fees and sluggish confirmations upon sending Bitcoins. Many have said that it is wise to wait patiently for the developers of Bitcoin to carry out scaling solutions, but we don’t know when it will be done. So people are urging altcoin using instead for faster transactions and lesser fees. However, is it really worth it?
Bitcoin Swapping to Altcoins
Just like Bitcoins, altcoins can also be acquired through an exchange. Exchanges enables you to trade an alternative digital currency but almost all still prefers Bitcoin. Therefore it still requires the use of Bitcoin network to make a transaction that necessitates a miner fee and waiting time.
Signing up in order to make use of the exchange that takes time and needs verification purpose should be done as well. Aside from Shapeshift that doesn’t undergo the registration process, almost all exchange platforms requires that procedure.
Whenever you use a third party exchange, you are also exposed to the risk of fund keeping on a platform that may be put in jeopardy anytime. Dead exchanges of altcoin such as Cryptsy and Mintpal have proven that user funds can vanish in a swift with no warning.
Aside from the things mentioned, an exchange of Bitcoin for altcoins will still make need Bitcoin and altcoin’s mining fee as well as the execution fee of the exchange. Moreover, spreads can be not the same in every altcoin exchanges so you can possibly lose more while waiting on a purchase booking to fulfill the selling request.
Volatility is a major concern in this market. The volatility of Bitcoin significantly decreased for the past eight years. But it is unlikely for the alternative cryptocurrencies that have just been developed. Bitcoins has been less volatile in the market and it continues to improve better.
Willy Woo, an analyst and Bitcoin proponent dicussed in a comprehenive detail the reason of Bitcoin’s less volatility than Altcoin last December. Woo added that Bitcoin volatility in two years will compare most fiat currencies. Woo as well explained that Bitcoin is on it’s way in becoming the most stable currency globally.
Instead of saving, bigger losses can be achieved for transactions not settled immediately when using an altcoin. Also, having another wallet for altcoins to spend money may be more devastating since price change affects the person’s buying power. The volatility of altcoin may contribute to more money spending rather than paying the increased transactions fees for Bitcoin.
Merchants and Infrastructure
Bitcoin has the biggest infrastructure making it’s network effect go deep in contrast to every other altcoin. Altcoin acceptance of merchants is far less compared to a hundred thousand plus merchants globally that accepts Bitcoin.
There are only a few places where other digital currencies are accepted so altcoin using is far from being convenient. Bitpay also, has no altcoin support like other majority worldline payment processors as well as debit cards who only uses Bitcoin.
For users to be able to hold an altcoin by the aid of a secondary wallet in preference of letting a vulnerable exchange hold your funds, the token’s limited infrastructure must be used. Majority mostly of altcoins has a very few infrastructure.
The QT client of an altcoin may need to be downloaded since there are only less alternative light wallets. Furthermore, most of altcoin light client wallets isn’t reputable or tested enough leading to easy losing of funds.
Altcoin Blockchain Issues
Just like for Bitcoins, Altcoins also experiences the same issues like late confirmation times as well as attacks in the network. An example scenario happened some months ago in which an attacker made a lot of problems for Ethereum network users. All throughout the months of Fall 2016, this network had greatly suffered because of a lot of computational DDos attacks.
This resulted problems in the GETH client which enforced some users to use Parity client instead. Additionally, all the transactions spent hours up to days to work across the network.
Also in late 2014, the Dash (known formally as Darkoin) Society went through a fork emergency upon trying to apply their new mastemode system by a succession of forks. In this even, there were users who were unable to sync their wallet clients, and famous altcoin exchanges froze the deposit and withdrawals of Dash.
Holder of Dash lost a signifcant amount because of market volatility in line with the emergency fork. The price of per Dash went from $15 before the issues and dropped to $5 in the next few months.
Bitcoin Has Its Problems, but Altcoins Seem to Have Far More
Sparing cash utilizing an altcoin rather than Bitcoin to maintain a strategic distance from higher excavator charges may not be to individuals’ greatest advantage. Altcoins might be valuable for other specialty applications like namelessness administrations, however to spare a couple of pennies it may not be justified, despite all the trouble.
The truth of the matter is, there are much more dangers required with picking to utilize an altcoin for settlement. From multiple points of view, Bitcoin’s advantages still overshadowing elective monetary standards, even with higher expenses and slower affirmation times.
Be that as it may, if the Bitcoin organize does not scale and the expense advertise keeps on rising quickly then a departure to an altcoin could happen.
Author: myBTCcoin – Bitcoin & Litecoin Mining Pool