What are Altcoins?

Since the creation of Bitcoin in January 2009, thousands of other cryptocurrencies have gained global attraction, often referred to as altcoins, which is short for “alternative coins.”Essentially, any cryptocurrency other than bitcoin is considered an altcoin. Altcoins are created to solve different fundamental and ideological problems than bitcoin, often utilizing unique and innovative technology and strategies to achieve their use case.

Bitcoin uses an entirely open-source code, so anyone or any group of people can use Bitcoin’s code to create their own altcoin. Typically, altcoins aim to improve specific characteristics or functionalities of bitcoin in unique ways. For example, some coins have different economic models, some have advanced privacy capabilities, some involve different programming languages that allow applications to be built on top of them, and some include different mining algorithms such as proof of work and proof of stake.

Despite the surge in altcoins, many are lackluster in terms of usefulness and innovation. As of January 2018, there are roughly 1475 altcoins being actively tracked by coinmarketcap, and we can expect thousands more will be created over the next few years as crypto becomes more mainstream. Additional use cases will continually drive innovation and demand for new coins with highly specialized capabilities.

However, beware of frauds and scams that claim to rocket you to the moon. Many small cap altcoins are extremely risky with unproven technology, limited community involvement and untested market demand. There is never reward without risk, however. Adjust your investment parameters accordingly, and invest in technology that you believe in with solid management teams that can execute on their glorious roadmaps.

The top 100 coins on coinmarketcap is generally a good place to start when looking for legitimate coins, but remember to always “DYOR” (do your own research) and only make investments you are willing to lose. But with a little bit of luck, you might just find your rocket ship.