What You Need to Know About Altcoins

Bitcoin is the first and most popular cryptocurrency, but there are hundreds of other currencies out there that, in different aspects, excel at the technology. Some of them are very similar in principle to Bitcoin, but others follow their own pattern.

While many terms in the world of crypto are so cryptic in meaning you can never guess, the “altcoin” term is pretty straightforward. “Altcoin” comes from “alternative coin” and is used to identify all the other coins that are not Bitcoin but its alternatives, in other words “alternative currencies.”

The group of altcoins is huge and diverse. Some of these coins are (almost) as popular as Bitcoin, while other coins are hardly known (and trusted) by anybody else but their developers.

There are more than one-thousand Altcoins today, so obviously they fill a void. The short answer is that so many Altcoins exist because they offer an alternative to Bitcoin. These coins not only address a limitation in Bitcoin but also offer different functionality. Bitcoin is a revolution, but this doesn’t mean it’s perfect. On the contrary, it has lots of areas that could use improvement, such as cheaper and faster transactions, better privacy, an optimized approach to mining, etc., and this is where Altcoins are useful.

However, this isn’t the only reason Altcoins exist. While many Altcoins are legit, there is also a large number of so called “Scamcoins.” These are “pump and dump” coins and the sole purpose of their existence is to make their developers rich by scamming everybody else. These coins start low and gain some traction (and lots of hype) with the intention to lure investors. After the value of these coins is pumped, it either drops drastically, causing huge losses to investors, or the coin altogether disappears.

It’s not possible to compare Bitcoin to every single Altcoin out there, but basically the differences are in three aspects: popularity, price, and technical details. Bitcoin is still the most popular currency, and for many of its hardcore fans, no alternate currency can ever be better.

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As for price, the prices of Altcoins vary almost as drastically as the price of Bitcoin itself. What is more, their cycles generally overlap – i.e. when the price of Bitcoin goes up/down, the same happens with the prices of Altcoins, though the exact percentages differ. Of course, it’s not impossible to observe the price of Bitcoin going up/down, while the price of a given Altcoin goes in the opposite direction (i.e. down instead of up and vice versa ), but as a rule they change in tandem.

The topic about the technical differences between Bitcoin and Altcoins is huge. These technical differences include differences in the hashing algorithm, blocksize, privacy protection, forking mechanism, etc.

I wish there was a short answer to this question, but unfortunately there isn’t. With thousands of Altcoins available, there are at least a dozen coins that draw special attention. Some of the ones I will specifically mention are Ethereum, Ripple, Litecoin, Dash, Cardano, Monero, and NEO, but again, there are at least twenty other Altcoins that in one aspect or another deserve attention. If you are curious to see which other coins are doing well in terms of market capitalization, you can check this list.

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