What Are Altcoins? A Complete Guide

Sometimes, this concern can be a barrier for an altcoin to gain popularity and get the traction it needs to succeed in the marketplace. Altcoins are any cryptocurrencies other than Bitcoin, each with unique features. In short, altcoins are the backbone of crypto diversity, offering features Bitcoin doesn’t. By the end, you’ll not only know what altcoins are—you’ll understand how they shape the future of decentralized finance. Altcoins emerged from the desire to innovate and improve upon the foundational principles established by Bitcoin.

Litecoin

This breakthrough rapidly positioned Ethereum as a central hub for decentralized finance and other cutting edge crypto applications. While Bitcoin remains the first and largest cryptocurrency by market capitalization, altcoins continue to exist in many diverse forms. Each altcoin aims to address specific use cases or perceived limitations of Bitcoin. Some focus ibm online courses blockchain on how to provide faster transaction confirmations, others prioritize privacy, and many build complex ecosystems through smart contracts and decentralized applications. Altcoins, short for “alternative coins,” are any cryptocurrency other than Bitcoin (and sometimes Ethereum).

Before making any high-risk investments in cryptocurrency or digital assets, investors should conduct thorough research. Please be aware that any transfers and transactions are done at your own risk, and any losses incurred are entirely your responsibility. NFTevening does not endorse the purchase or sale of any cryptocurrencies or digital assets and is not an investment advisor. Additionally, please note that NFTevening participates in affiliate marketing. Although all are some form of digital currency, altcoins typically use new features or consensus mechanisms beyond Bitcoin’s design. They may target different niches, focus on faster speeds, or introduce smart contracts and governance.

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Litecoin is known for creating a global payment system, yet boasts a decentralized network that’s light on costs but offers speed. There are many different types of altcoins, each created with their unique purpose to fill an existing gap or a niche. Listing every altcoin would read like a novel, but we’ve outlined some of the more popular and interesting altcoins below. Bitcoin has had wide adoption, but it has taken time to achieve this. Early adopters have faired well financially and have the potential for higher returns. Altcoins can present investment opportunities, though they also come with higher volatility and risk.

The best practice is to keep two separate wallets – one for BTC and one for your alternate coins or altcoins. When you think of cryptocurrency or altcoins, the first thing that comes to mind isn’t likely a meme, but that is precisely . That’s right — this now famous altcoin began as a joke, yet quickly gained a fan base and garnered attention from cryptocurrency enthusiasts, as well as the media. As blockchain adoption grows, altcoins will continue shaping industries, economies, and even governments. Historically, this happens during strong bull runs when investors rotate profits from Bitcoin into smaller-cap tokens. Altcoins, or “alternative coins,” refer to any cryptocurrency that’s not Bitcoin.

Notable Altcoins

Tokens are not just for speculation — they power real applications. A stablecoin maintains a fixed value, usually pegged to the US dollar. They are crucial for trading, remittances, and as a safe haven from volatility.

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• On 10 June 2021, the Basel Committee on Banking Supervision proposed that banks that held cryptocurrency assets must set aside capital to cover all potential losses.
• These types of altcoins are a new subset of the crypto market that’s meant to reduce volatility.
• Any descriptions of Crypto.com products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation.
• Altcoins, or “alternative coins,” refer to any cryptocurrency that’s not Bitcoin.

The more developers, businesses, and users integrate an altcoin, the stronger its market position becomes. With Bitcoin reaching highs of $100,000, many investors find the entry point too steep. Altcoins offer a lower barrier to entry, making them an attractive alternative.

Why Altcoins Exist: Beyond Bitcoin

Therefore, staking-based coins are more environmentally friendly and affordable than coins mined using a PoW mechanism. The legal framework surrounding cryptocurrencies is still developing, which adds uncertainty to altcoin investments. Please note that the availability of the products and services on the Crypto.com App is subject to jurisdictional limitations.

• Some altcoins, like Litecoin, XRP, and Dash, are designed for fast, low-cost payments, making them suitable for transactions.
• During bitcoin season, investors pile into bitcoin, and bitcoin significantly outperforms other cryptocurrencies.
• Like Bitcoin, altcoins are a form of decentralized digital currency created and traded on the blockchain and available through the best cryptocurrency exchanges.

Utility tokens enable services within a network, like purchasing services, paying fees, or redeeming rewards. Filecoin, which is used to buy storage space on a network and secure the information, is an example of a utility token. Security tokens are tokens that represent fundraising efforts or ownership. For this to work, the asset must be transparently secured and held.

Money laundering

XRP is the native token of the XRP Ledger, designed for institutional cross-border transactions. It provides fast, low-cost international payments, making it a preferred run python script with parameters on button click choice for banks and financial institutions. However, regulatory challenges, particularly with the SEC, have impacted its adoption in certain markets.

Play-to-Earn Tokens

For example, a piece of art might have security tokens that divide ownership of that asset and validate the how to buy stock in google ownership of it. Or a company might have its ownership represented by security tokens. So this kind of token can allow more traditional assets to be securitized. Governance tokens allow holders certain rights within a blockchain, such as voting for changes to protocols or having a say in the decisions of a decentralized autonomous organization (DAO). Because they are generally native to a private blockchain and used for blockchain purposes, they are utility tokens but have come to be accepted as a separate type because of their purpose.

Generally speaking, most altcoins are less liquid than Bitcoin due to the lower number of investors without Bitcoin’s popularity. In 2025, altcoins represent the creative, experimental, and practical side of crypto. They’re not just “alternatives to Bitcoin”—they’re the fuel of the Web3 revolution. Altcoins include all cryptocurrencies other than Bitcoin, such as Ethereum, Litecoin, and Ripple.