Altcoin definition: altcoin is a term used for every cryptocurrency other than Bitcoin. In this article, find out what an altcoin is and what sets altcoins apart from other cryptocurrencies.
What Is an Altcoin? – Definition
An altcoin is a virtual currency that has a lot in common with Bitcoin, because Bitcoin is open source and many altcoins are based on it. Even so, an altcoin can be very different from Bitcoin.
- For example, the consensus mechanism used to produce blocks or validate transactions may differ from Bitcoin’s.
- Other altcoins also stand apart from the most popular cryptocurrency by offering their own features. For example, smart contracts or lower volatility set them apart from Bitcoin.
- Altcoins now account for 40% of the total cryptocurrency market. Some of them are very popular in the crypto world, such as Ethereum (ETH), best known for enabling smart contracts without the need for a trusted third party.
- Litecoin (LTC) is also a well-known altcoin, with a reputation as a cryptocurrency that processes transactions quickly and charges low fees.
To learn more, also read our guides “Stablecoin Definition” and “Crypto Yield Farming”.
Altcoin Synonyms
- Alternative Coin
- Alternative cryptocurrencies
- Digital Currency Alternative to Bitcoin
- Alternative Virtual Currency
- Alternative Digital Currency
- Bitcoin Alternatives
- Alt Coin
- Alt
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Altcoin is made up of two words: “alt”, meaning alternative, and “coin”, meaning “token”.
Terms and Vocabulary Related to Altcoins
Fork – Definition: a fork is the term used for the split of an original cryptocurrency into several branches. In other words, a fork generates alternative cryptocurrencies from a digital currency.
Bitcoin – Definition: Bitcoin is the virtual currency with the largest valuation. Bitcoin is also the name of a blockchain protocol that allows transactions to be carried out transparently and without risk. Altcoins are the cryptocurrencies other than bitcoin.
Blockchain – Definition: the blockchain is a ledger system used to secure transactions without relying on a trusted third party. In blockchain terms, an alternative cryptocurrency is created when a chain of blocks splits into several separate chains.
ICO – Definition: an ICO, or Initial Coin Offering, is a fundraising method that mainly uses cryptocurrencies — in other words, Bitcoin or altcoins are used to raise funds.
Litecoin – Definition: Litecoin is an altcoin based on Bitcoin’s blockchain technology. It has a reputation for being easier to use for everyday payments.
Smart Contract – Definition: a smart contract is a digital agreement that executes automatically based on predefined criteria.
Ethereum – Definition: Ethereum is the name of one of the most popular cryptocurrencies after Bitcoin. Ethereum is an alternative virtual currency based on a blockchain designed by Vitalik Buterin.
Stablecoins – Definition: stablecoin is a term for a cryptocurrency that has a stable price and works simply, like Bitcoin.
Proof-of-Stake – Definition: Proof-of-Stake is a process used to validate blocks of transactions.
What Is Altcoin Season? – Definition
Altcoin season is the period during which Bitcoin’s market capitalization falls compared with the market capitalization of other cryptocurrencies. In other words, it is the period during which Bitcoin loses its dominance of the cryptocurrency market to the benefit of altcoins.
Altcoin Definition: Key Takeaways in November
To sum up, altcoin is a term for all cryptocurrencies other than Bitcoin. Together, alternative cryptocurrencies make up nearly 40% of the cryptocurrencies on the market. Most alternative virtual currencies are based on the same technology as bitcoin. However, other altcoins such as Ethereum differ from the system used by Bitcoin.
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