What is an Altcoin?
“Altcoin” is a term used in the cryptocurrency space to abbreviate the phrase ‘Alternative Coin.’ Altcoins are alternative in regards to Bitcoin – meaning that an Altcoin can more generally be defined as a cryptocurrency that’s not Bitcoin. Altcoins typically share a few other aspects:
- Lower Market Capitalization: due to the nature of Bitcoin’s dominance in the crypto-space, most coins competing with Bitcoin have less fiat capital put into them.
- Barrier to Entry: Bitcoin is fairly easy to get ahold of – assuming you’ve got the cash – while many Altcoins cannot be purchased directly with government-backed currency. Instead Bitcoin is often used as an intermediary for purchasing the altcoins.
- More Niche: Many altcoins are developed in order to provide features that Bitcoin doesn’t. This often creates microcommunities and microeconomies centered around the particular cryptocurrency.
- More Volatile: It’s not unusual for an Altcoin to increase in value 1000% in a single week. Sometimes this comes from an organic interest, but often it can be the result of a Pump and Dump scheme, so be careful!
Examples of Altcoins
For a comparative list of some major altcoins, read this article.