What Are Altcoins?

Altcoins, generally speaking, are every cryptocurrency other than Bitcoin. Any crypto coin or token that is not Bitcoin—like Cardano, Solana, Polkadot, and Uniswap—can be considered as an altcoin.

A version of this article was first published here.

With Bitcoin being the most prominent and established cryptocurrency globally, some consider Bitcoin the “primary” cryptocurrency.

Bitcoin, compared with other cryptocurrencies, has by far the largest market capitalization or the total value of issued cryptocurrency. But there are thousands of unique cryptocurrencies, each with varying monetary values and use cases.

Keep reading to understand more about altcoins, including how you can buy altcoins and if any altcoins make sense for your cryptocurrency portfolio.

Definition and Examples of Altcoin

The strictest definition of an altcoin, short for “alternative coin,” is any cryptocurrency other than market leader Bitcoin.

But, increasingly, cryptocurrencies including Ethereum, Litecoin, and Dogecoin are being excluded, along with Bitcoin, from the altcoin definition.

Cryptocurrency tracking site CoinMarketCap lists thousands of cryptocurrencies, of which all but a small number are considered altcoins. Every altcoin has a unique backstory and community. Some may prove to be both functional and valuable and could experience significant price increases over time.

Others may turn out to be useless or even scams.

How Altcoins Work

Like Bitcoin, altcoins function using blockchain technology. A blockchain is a digital, distributed database that is simultaneously maintained by multiple, sometimes hundreds or even thousands, of computers worldwide.

New transactions are verified and recorded on the blockchain as blocks of transactions.

Transactions cannot be reversed after they are broadcast to a blockchain.

Many altcoin creators offer unique features to differentiate their tokens from Bitcoin and other cryptocurrencies.

For example, the Stellar blockchain aims to operate in a way that is faster, cheaper, and more energy-efficient than its larger rivals.

Dogecoin was founded in 2013 as a joke and rose to prominence after gaining support from the likes of Elon Musk.