Altcoin

DEFINITION of 'Altcoin'

Once you begin to get involved with cryptocurrencies, you may be deeply surprised to learn that Bitcoin actually has hundreds of alternatives available today, each with unique differences, functionalities, and purposes.

Altcoin means alternative coins and is another term for cryptocurrencies. Since its’ release in 2009, many have noticed its crucial advantages over fiat money, while also accepting the fact that some of its aspects can be significantly improved. That has lead to the appearance of hundreds of different Altcoins, which are all ultimately based on the same technology of the Blockchain but are designed differently in some ways, in order to achieve different goals.

BREAKING DOWN 'Altcoin'

The word “Altcoin” is an abbreviation of “Bitcoin alternative,” and thus describes every single cryptocurrency except for Bitcoin. Altcoins are referred to as Bitcoin alternatives because, at least to some extent, most Altcoins hope to either replace or improve upon at least one Bitcoin component.

Most Altcoins are little more than Bitcoin clones, changing only minor characteristics such as its transactions speed, distribution method, or hashing algorithm. They are mostly peer-to-peer, involve a mining process and offer efficient and cheap ways to carry out transactions on the web. But even with many overlapping features, altcoins vary widely from each other.

Even with many close competitors, Bitcoin is still leading the virtual currency pack. Newer and more innovative versions are getting launched that offer modifications in areas like transaction speed, privacy, proof-of-stake, DNS resolution and more. However, some Altcoins innovate by experimenting with useful features Bitcoin does not offer. List of 478 Altcoins includes Litecoin, Dogecoin, Peercoin, Feathercoin, Zetacoin, Novacoin, etc. Most of these coins do not survive for very long. One exception is Litecoin, which was one of the first Altcoins.

Many cryptocurrency experts argue if Altcoins are necessary or not and doubt their success because it’s hardly possible to rival the infrastructure Bitcoin boasts. However, Altcoins serve an important role. Decentralization is one of Bitcoin’s most prominent goals, and Altcoins further decentralize the cryptocurrency community.

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2022-12-12 • Updated

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