What is an Altcoin?

Altcoin is a combination of 'alternative' and 'coin' and includes all cryptocurrencies launched after Bitcoin. They often aim to improve upon Bitcoin's design, offer different features, or serve specific use cases.

Examples

Thousands of altcoins exist, ranging from large-cap coins like Ethereum (ETH), Ripple (XRP), and Litecoin (LTC) to smaller, newer projects.

Categories

Altcoins can be broadly categorized based on their technology or purpose:

• Mining-based: Use a Proof-of-Work consensus mechanism like Bitcoin.
• Stablecoins: Aim to maintain a stable value relative to a fiat currency or other asset.
• Security Tokens: Represent ownership in an asset or company, similar to traditional securities.
• Utility Tokens: Provide access to a specific product or service within a blockchain ecosystem.
• Meme Coins: Often created as a joke or based on internet memes, typically driven by community hype (e.g., Dogecoin, Shiba Inu).

Considerations

Altcoin investments are generally considered higher risk than Bitcoin due to factors like lower liquidity, higher volatility, and newer, less proven technology.

Related Terms

• Bitcoin (BTC)
• Cryptocurrency
• Stablecoin
• Token
• Shitcoin