An altcoin is a digital currency that is not Bitcoin. The name is derived from “alternative coin” as these tokens were developed as an alternative to Bitcoin, which was the first and remains the best-known cryptocurrency. After Bitcoin came out in 2009 and demonstrated that money could exist outside of the bank and government system, developers and their communities around the world began developing their own coins with slightly different purpose, technology, or rules.
For the most part, altcoins were developed to improve something that Bitcoin did not include. Some were made to facilitate transactions faster and cheaper. Others specifically sought to address issues of privacy, energy expenditure, and new applications that could run on a blockchain. A handful even tried entirely new concepts, including decentralized financial systems, gaming assets, and stable digital currencies pegged to the value of fiat currency.
Over time, the term “altcoin” became synonymous with thousands of various cryptocurrency projects. Some gained millions of users, some withered away almost immediately. However, all types of altcoins share the same basic principle – blockchain technology is being used to transfer value without a centralized authority. In summary, an altcoin is anything of digital currency for attempted knock-off of Bitcoin with some alternative value proposition.
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