Altcoins are generally defined as all cryptocurrencies other than Bitcoin (BTC). However, some people consider altcoins to be all cryptocurrencies other than Bitcoin and Ethereum (ETH) because most cryptocurrencies are forked from one of the two. Some altcoins use different consensus mechanisms to validate transactions, open new blocks, or attempt to distinguish themselves from Bitcoin and Ethereum by providing new or additional capabilities or purposes.

Most altcoins are designed and released by developers with different visions or uses for their tokens or cryptocurrency. Learn more about altcoins and what makes them different from Bitcoin.

KEY TAKEAWAYS

• The term altcoin refers to all cryptocurrencies other than Bitcoin (and for some people, Ethereum).
• There are tens of thousands of altcoins on the market.
• Altcoins come in several types based on what they were designed for.
• The future of altcoins is impossible to predict, but if the blockchain they were designed for continues to be used and developed, the altcoins will continue to exist.

Understanding Altcoins

"Altcoin" is a combination of the two words "alternative" and "coin." The term generally includes all cryptocurrencies and tokens that are not Bitcoin. Altcoins belong to the blockchains for which they were explicitly designed. Many are forks—a splitting of a blockchain that is not compatible with the original chain—from Bitcoin and Ethereum. These forks generally have more than one reason for occurring. Most of the time, a group of developers disagree with others and leave to make their own coin.

Many altcoins are used within their respective blockchains to accomplish something, such as ether, which is used in Ethereum to pay transaction fees. Some developers have created forks of Bitcoin and re-emerged as an attempt to compete with Bitcoin as a payment method, such as Bitcoin Cash.

Others fork or are developed from scratch, attempting to create a blockchain and token that appeals to a specific industry or group, such as Ripple's attempt to attract the banking industry with a faster payment system.