The purpose of this article isn’t to tell you how to buy altcoins. It’s not going to explain how to trade altcoins. And it’s not going to reveal when altcoin season is coming, or the top 2024 altcoins.
Instead, we’re going to focus on the different types and what they do, so you have a clearer understanding of what they actually are! It’s all part of our ongoing efforts to educate and shed more light on the still emerging worlds of blockchain and cryptocurrency.
Definition and Origin of Altcoins
The term commonly refers to anything other than Bitcoin and was originally coined in the early days of cryptocurrency when alternative currencies first emerged. The landscape has changed a lot since then. The first altcoin was released in 2011.
Key Differences Between Altcoins and Bitcoin
Bitcoin maintains its status as ‘digital gold’, but tens of thousands of tokens and coins have been created representing the rest of this decentralized system. The best known altcoin is Ethereum. Altcoins have a massive range of utilities and purposes, but they tend to fall into four major categories. Next, we’ll take a look at these categories.
Types of Altcoins
Let’s take a look at some of the key categories and then see where Chiliz $CHZ and Fan Tokens fit in.
Some of the most common include:
Stablecoins
Stablecoins are designed to maintain a stable value by pegging their price 1 to 1 to a fiat currency, such as the dollar, or other form of collateral. USDT – Tether – is the best known stablecoin.
Utility Tokens
Utility Tokens have utility – meaning a clear use or uses. Take crypto gaming for instance.
Many games rely on utility tokens to power them. Utility tokens can be used as in-game currency, but they can also be used to access rewards or gain entry to exclusive areas.
Governance Tokens
Governance Tokens grant voting rights on a blockchain. They influence decisions related to things like protocol upgrades and funding allocation and are native to a particular blockchain.
Memecoins
A ‘memecoin’ is a crypto that has originated from an internet meme or has some other humorous characteristic. They have limited or no utility and their popularity and demand is community and influencer-driven.
Where do Chiliz $CHZ and Fan Tokens fit in?
Chiliz $CHZ is the governance token of Chiliz Chain and the native token used for paying transaction ‘gas’ fees on chain as developers build the products and services that will form the future of sports. Chiliz is also used as a digital currency on Socios.com, where it’s used to purchase Fan Tokens.
Fan Tokens are a subset of Utility Tokens, because they provide access to rewards and engagement opportunities for holders on Socios.com.
They are also a key feature on Chiliz Chain because brands, entrepreneurs, teams and developers can integrate them into new dApps built on the chain and immediately access a 2M+ strong audience of engaged users ready to embrace their concept.
The Future of Altcoins
Increased adoption and regulation will see even more clearly defined – and widely understood – use cases for altcoins emerge.
The utility and future of Chiliz $CHZ however is already clear; to serve as the native and governance token of Chiliz Chain as we fulfill our vision to change the way fans engage with their passions by building the biggest and most trusted decentralized, web3 ecosystem for sports and entertainment properties to deliver products and services that bring fans and brands together.
