Altcoin is any cryptocurrency other than Bitcoin. The term is a portmanteau of "alternative" and "coin," and it refers to all cryptocurrencies other than the original one.

Why There Are So Many Altcoins

Bitcoin was a revolutionary innovation, but its design was purposefully limited to function as a peer-to-peer electronic cash system. The creation of altcoins began to explore the potential of blockchain technology beyond just digital money. For example, some altcoins were created to offer features like faster transaction-hash speeds, different security models, or a greater focus on privacy.

The most significant development was the creation of programmable blockchains like Ethereum. This allowed developers to build new platforms and applications with their own unique digital assets, which also fall under the category of altcoins. As a result, the altcoin market has grown to include thousands of different projects, each with its own purpose, ranging from DApps to global financial systems.

The Big Picture

Altcoins can be broadly categorized by their use case. Some are designed as improved versions of Bitcoin with better scalability or privacy. Others are utility tokens that power a specific DApp or network. Still others are governance tokens that give holders a say in a DAO's future. The diversity of the altcoin market reflects the vast potential of blockchain technology to disrupt industries beyond just finance.