Alternative currencies or altcoins as they are known for short refer to any type of Cryptocurrency that is different from Bitcoin which was the first public Cryptocurrency coin in existence.
Altcoins frequently differ from Bitcoin in terms of functionality, such as Litecoin’s ability to execute a block every 2.5 minutes and Ethereum’s smart contract functionality. In 2016, Ethereum has arguably one of the most following of any altcoin and was the most widely used blockchain in 2020. Altcoin market rallies are commonly referred to as an “alt season”.
Some people consider altcoins to be anything separate from Bitcoin or Ethereum as these are the 2 largest cryptocurrencies at the time of publishing and the majority of coins and blockchain projects are built on either of these 2 blockchains.
Key takeaways about altcoins
- Altcoins can be bought and sold across popular exchanges such as Binance and Crypto.com
- Altcoins can often be mined with specialized hardware and software which rewards miners with a small amount of crypto for processing transactions on the blockchain. This is an exception however with some altcoins like Ethereum which adopt a different method called proof of stake.
- Altcoins are considered riskier than their more established counterpart and may or may not actually utilize proper blockchains. Scams or worthless altcoins are commonly referred to as shitcoins
- Altcoins can be used in tandem with Bitcoin: Altcoins can supplement established coins like Bitcoin in a variety of ways. Some altcoins, for example, are intended to be faster or more efficient than Bitcoin, while others offer additional functionality such as smart contracts for validation.
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