Level 1 — Understanding Crypto
What are altcoins?
3 minute read
One category, many different coins
Illustrative example · not live data
Bitcoin · BTC
Ethereum · an altcoin
Other coins · altcoins
'Altcoin' simply means any cryptocurrency that isn't Bitcoin. There are thousands of them, and they vary enormously in quality and purpose.
Some, like Ethereum, do things Bitcoin doesn't — Ethereum can run programs ('smart contracts') that power apps, games and financial services. Others, like Litecoin, are mostly variations on Bitcoin's idea.
Many altcoins are much smaller and riskier than Bitcoin. Their prices can swing wildly, and some projects fail completely. A well-known name and a large market value are signs of a more established coin, but never a guarantee.
A common rule of thumb: the smaller and newer the coin, the more it behaves like a lottery ticket rather than an investment.
Key points to remember
- Any crypto that isn't Bitcoin is an altcoin
- Some add new features (e.g. Ethereum's smart contracts)
- Smaller coins are usually much riskier
- Many projects fail — research before buying