10 Ways to acquire Altcoins
10 Ways to acquire Altcoins
Ever since the arrival of Bitcoin, the world’s first peer-to-peer electronic cash system back in 2008, developers and programmers have been looking for ways to improve upon it. Being open-source, it is possible to develop, or ‘fork’, the original Bitcoin blockchain to create new cryptocurrencies, sometimes called ‘fork coins’. These Bitcoin alternatives are commonly known as an ‘altcoins’. The most successful fork coins include Bitcoin Cash and Bitcoin Gold. Altcoins are either referred to as ‘coins’ meaning that they reside on their own blockchain, or ‘tokens’ because they reside on an existing blockchain.
The first-ever altcoin – Namecoin – was released in 2011 and uses the same proof-of-work (POW) algorithm as Bitcoin. Since then, the complexity of creating an altcoin has dropped significantly. In fact, anyone can use Forkgen to fork the Bitcoin blockchain and create their own altcoin. Today, there are over 1,600 altcoins listed on industry website Coinmarketcap and many more are unlisted. Among these altcoins, some are tokens and others are completely unique cryptocurrencies such as IOTA that doesn’t reside on a blockchain.
This presents unique challenges to would-be acquirers who must carefully research any altcoin they wish to acquire. According to Fortune, over half of the new altcoin projects launched last year have already failed. In this article, we will cover ten ways to acquire altcoins. Although all acquisitions in altcoins are inherently risky, we’ve ordered this list in terms of risk, from the least risky to the riskiest.
#1. Buy and hold altcoins on an exchange
The simplest and easiest way to acquire altcoins is simply to buy some on any exchange that accepts fiat currency such as USD, Euros or GBP. Coinbase – based in San Fransisco, California – is one of the safest and most trusted exchanges on which to buy altcoins. Besides Bitcoin, Coinbase offers three of the most popular and established altcoins; Bitcoin Cash (BCH), Ethereum (ETH) and Litecoin (LTC).
Head to Coinbase.com and sign up with your email address. Once you’ve clicked on the confirmation email they sent you, you’ll have your own account with four cryptocurrency wallets. There are three more steps before you can buy cryptocurrencies, all explained fully on the site. These are:
- Verify your phone number
- Upload a scan of your ID
- Add a payment method
Coinbase’s website walks you through these steps and you can then use your money to buy some of the three altcoins offered on the site. When you make a acquisition, your cryptocurrency will be deposited in your corresponding Coinbase wallet. Buying altcoins in the hope that their value will appreciate is the simplest and most straightforward way to acquire altcoins.
Although Coinbase has never been hacked and has insurance for some of its digital assets, we don’t recommend storing your altcoins in your Coinbase wallet long term. Consider storing your altcoins in a wallet that you control such as MetaMask – a browser extension for Ethereum, for example.
#2. Earn rewards for saving your altcoins
If you decide to buy altcoins, you can earn rewards for holding them on TokenUnion. As featured in Fortune, TokenUnion is a decentralized application that rewards you for holding Ethereum or ERC20 tokens. Let’s say you buy some Ethereum on Coinbase and want to save it. You can send your Ethereum into what’s called a ‘Holding Contract’ on TokenUnion and start earning rewards in the form of an altcoin called UNI. Any UNI you earn will be deposited back into your holding contract, thereby increasing the size of your position.
#3. Lend out your altcoins
There are many altcoin lending platforms such as the SALT Lending platform that let you lend out your altcoins for a profit. For example, SALT uses the Ethereum blockchain and opens up a new form of loan using a type of altcoin – SALT tokens – as collateral. This can be a great way to profit from the altcoins you own without losing potential gains from your holdings. There are many other platforms, such as EthLend to choose from.
#4. Earn cryptocurrency on BitBounce
One of the more practical ways to earn cryptocurrency is to use BitBounce, a cryptocurrency solution for spam emails. BitBounce, from Turing Technology, Inc., is a free email service that pays you for every message you receive from an unfamiliar sender. It’s available from the App Store here, Google Play here, or as a Chrome extension for Chrome here.
BitBounce helps you create a spam-free email account by charging a cryptocurrency fee to senders who you don’t know. This ensures that your inbox only contains emails from people you know or emails that you’ve been paid to receive. Simply sign up for BitBounce, add your email account and start earning a type of altcoin known as Credo. BitBounce takes a 30 percent fee from every email you’re paid to receive.
#5. Participate in an ‘Airdrop’
In the cryptocurrency world, an ‘Airdrop’ refers to the distribution of free cryptocurrency. Airdrops can take place for a number of reasons but most commonly occur because the creators of a particular altcoin want to generate publicity or attention. Airdrops usually require you to register and complete various activities in order to receive or stand a chance of winning altcoins as a reward. Arguably this is more akin to work than acquisition, but participating in an airdrop does give you an acquisition in an altcoin project. Given the high failure rate of altcoin projects, you need to carefully research the project you decided to participate in.
#6. Mine cryptocurrencies with NiceHash Miner
Mining Bitcoin requires a significant investment in a very expensive machine known as an ASIC miner. However, if you have a Windows PC or laptop with a decent graphics card, mining altcoins is one possibility. One of the simplest ways to do this is to download a free program called NiceHash Miner. There are two versions depending on whether you have an NVIDA or AMD graphics card. NiceHash Miner harnesses the power of your computer to mine altcoins on your CPU and/or GPU. You’ll be mining altcoins for other people and you’ll be paid in Bitcoin (BTC). NiceHash miner will constantly monitor the most efficient altcoin for your computer to mine. Dedicated miners invest in high-end graphics cards and aim to make a return on their investment by mining altcoins.
#7. Purchase in Initial Coin Offerings
When the creators of a new altcoin are ready to release their cryptocurrency to the market, they often offer their coins or tokens for sale in what’s known as an Initial Coin Offering (ICO). One acquisition strategy is to buy altcoins during an ICO when they are heavily discounted and then sell them for a profit when their price appreciates. As noted by Fortune, this is a highly risky acquisition strategy; over half over the ICO projects released during 2017 have already failed according to a survey from Bitcoin.com. To address this issue, a new cryptocurrency called Metronome (MET) was released via a descending price auction. This auction enabled acquireres to buy in at a price they felt was fair.
#8. Trade altcoins on Coinbase Pro
The eighth way to acquire in altcoins is to upgrade your Coinbase account to a Coinbase Pro account. Coinbase Pro is one of the most trusted cryptocurrency trading platforms and gives you the ability to trade a wide variety of altcoins and other digital assets. Coinbase Pro’s WebSocket lets you access market data in real-time and develop your own secure trading bots. Unlike the regular Coinbase website, this platform gives you protection as a trader via stop-loss and stop limit orders.
#9. Trade altcoins on CredoEx
An alternative way to acquire altcoins is to start trading them on a cryptocurrency-only exchange. CredoEx, headquartered in Silicon Valley, is great choice for many traders. You can join CredoEx with just an email address and gain access to over 10 cryptocurrencies. CredoEx is a crypto-only exchange meaning that you cannot acquire altcoins using your home currency. To start trading on CredoEx, simply sign up and then transfer some of the altcoins you earned on BitBounce or bought on Coinbase or other exchange to the corresponding wallet on CredoEx. CredoEx offers a comparable level of functionality to Coinbase Pro.
#10. Trade altcoins on Changelly
You can’t simply ‘swap’ or trade one type of cryptocurrencies for another on most exchanges. For example, if you have one Ethereum in your Coinbase wallet, you can’t simply exchange the Ethereum for Litecoin – you need to sell it first and then place an order for Litecoin. This can take time and incurs network fees. To address this problem, Changelly – based in Prague – was developed as a simple way to let traders exchange one cryptocurrency for another. Changelly charges a flat fee of 0.5% to exchange one cryptocurrency for another. Traders can access real-time market prices to take advantages of price fluctuations between different altcoins.
By far the most popular and common way to acquire altcoins is to simply buy and hold them in the hope that they will appreciate in price. However, other routes such as lending and saving altcoins are becoming increasingly common. purchasing in ICOs and trading altcoins are by far the riskiest strategies for purchasing in altcoins in 2018.