What Are Altcoins? A Guide For Investors in March 2025

But many altcoins have taken this premise and either used it to achieve different goals or sought to improve a perceived flaw in Bitcoin. We believe everyone should be able to make financial decisions with confidence. Despite their moniker, sometimes stablecoins are anything but stable. TerraUSD, a stablecoin pegged to the dollar, made headlines in May 2022 when it collapsed to just pennies on the dollar.

But project progress has been slow, and it lacks star applications to help boost its ecosystem, he says. It is designed to be used in the Ethereum blockchain and virtual machine to pay for transactions. This historic event was the first digital asset security to offer equity in a United States-based issuer. Altcoins are generally defined as all cryptocurrencies other than Bitcoin (BTC). However, some people consider altcoins to be all cryptocurrencies other than Bitcoin and Ethereum (ETH) because most cryptocurrencies are forked from one of the two. Cryptocurrency mining can be a profitable venture, but it is important to consider that there are many variables at play.

Is Ethereum an altcoin?

As the first cryptocurrency, Bitcoin captured the imagination of tech enthusiasts and investors alike, but it also sparked curiosity about what else could be achieved in the realm of digital currencies. The first notable altcoin, Litecoin, was launched in 2011 by Charlie Lee. Designed to be a “lighter” version of Bitcoin, Litecoin aimed to provide faster transaction times and a different hashing algorithm called Scrypt.

• While alt coins can offer innovation and growth opportunities, they often come with higher risks compared to bitcoin.
• However, the value of the coin itself has also helped fuel investor interest in the exchange ever since BNB started gaining popularity back in 2021.
• Because there are so many altcoins, they vary wildly in price, function and potential investment value.
• There are thousands of alternative cryptocurrencies, known as altcoins.

Its name is a portmanteau of “alternative” and “coin.” Since Bitcoin is widely regarded as the first of its kind, new cryptocurrencies are considered alternatives. Altcoins are any cryptocurrencies that are not Bitcoin (and, according to some experts, Ethereum). These coins provide a variety of functions beyond storing value and being used as currency. Some are created from forks in existing blockchains, and others are created for entirely new blockchains.

Top 10 Altcoins

More recent altcoins serve a variety of purposes depending on the goals of the developers. Altcoins (alternative coins) is a term used to describe all cryptocurrencies other than Bitcoin (BTC 0.69%). Their name comes from the fact that they’re alternatives to Bitcoin and traditional fiat money. When it comes to investing in altcoins, there are a few potential risks and drawbacks to keep in mind. The presence of altcoins in the cryptocurrency market has an impact on the overall stability and growth of the market.

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It provides insights into the project’s goals, team, token utility, use cases, roadmap, and market fit. Whitepapers are typically published before an altcoin’s launch and are readily available online. The community’s support and activity https://orbi-fina.com/ are also important, especially since many blockchain networks rely on the integrity of the participants who mine, stake, and verify the blocks. Examples of utility tokens include Filecoin (FIL) and Basic Attention Token (BAT).

How Altcoins Differ from Bitcoin

However, as bitcoin dominance is now overwhelming, alternatives will struggle to compete with bitcoin’s network effects and liquidity for payment use cases. The different types of altcoins are smart contract-based coins, meme coins, utility tokens, stablecoins, and privacy coins. PoS requires investors to hold funds in a cryptocurrency wallet in exchange for rewards over time.