Altcoin Definition
An Altcoin, a portmanteau of “alternative” and “coin”, is any cryptocurrency that is not Bitcoin. Bitcoin was the original and first cryptocurrency, hence all other cryptocurrencies that followed are termed as altcoins. Altcoins include prominent cryptocurrencies such as Ethereum, Ripple, and Litecoin, among thousands of others, each unique in their own technology, utility, and economic model.
Altcoin Key Points
- Altcoin stands for “alternative coin”, indicating their position as alternatives to Bitcoin.
- Altcoins come in many forms with different architectural structures, consensus mechanisms, functionalities, or uses.
- Notable altcoins include Ethereum, Ripple, Litecoin, and Bitcoin Cash.
- While Bitcoin dominates the market, many altcoins have also established significant market presence and utility.
What is an Altcoin?
An altcoin is any digital or cryptocurrency that exists as an alternative to Bitcoin. As Bitcoin was the first cryptocurrency to be invented, and forms the core of the cryptocurrency market, every other cryptocurrency that is not Bitcoin, is referred to as an altcoin, or alternative coin.
Why Altcoins?
Altcoins were created with the intention of improving upon, modifying, or advancing the technology that Bitcoin is based on. Additionally, they also emerged out of a need to fulfill different use-cases and provide solutions to various issues, some that Bitcoin couldn’t.
When did Altcoins begin?
Altcoins began appearing after Bitcoin’s invention and public adoption, with NameCoin being the first altcoin, appearing in April 2011. The growth of altcoins has been exponential, with thousands of them existing in the cryptocurrency space today.
Where are Altcoins used?
Altcoins are used in the same digital domains as Bitcoin. They’re used for peer-to-peer transactions, smart contract execution (Ethereum), remittances (Ripple), privacy-focused transactions (Monero) and much more, both in online and offline scenarios.
Who uses Altcoins?
Anyone who uses cryptocurrencies could potentially use altcoins. This includes individuals seeking to make transactions, businesses looking to leverage blockchain technologies for their operational needs, and investors looking to diversify their investments.
How are Altcoins different from Bitcoin?
Altcoins can differ significantly from Bitcoin in a number of aspects, including their architectural structure, consensus mechanism, functionality, speed, security, privacy, and cost of transactions. For example, Bitcoin uses the Proof of Work consensus mechanism, whereas altcoins might use Proof of Stake, Delegated Proof of Stake or another consensus model.
