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What is Altcoin?
Altcoin is a term that is used to describe cryptocurrencies other than bitcoin. A large proportion of altcoins are considered to be forks of bitcoin, with very limited and uninteresting changes. Despite this, many altcoins market themselves as being superior to bitcoin. The initial success of Bitcoin made it possible for all of the other cryptocurrencies to gain their own success.
Altcoin itself is derivative of “alternative” and “coin”.
The main way that an altcoin is marketed, is by addressing some of the potential limitations of bitcoin, whilst maintaining the core functionality that appeals to users of bitcoin.
Due to the fact that altcoin means any cryptocurrency which is not bitcoin, there are a vast number of different altcoins in existence.
Similar to Bitcoin, most altcoins are based on a peer-to-peer, decentralized network and involves a process of block mining which prompts users to solve problems in blocks to receive a cryptocurrency reward.
Despite the similarities, altcoins can vary widely from each other and can be incredibly different from bitcoin. For example, some altcoins have varied proof-of-work algorithms, different ways for users to sacrifice energy to mine blocks and improvements to user anonymity.
The most well-established incantations of altcoins include Litecoin, Ethereum (Holds the second highest market share of any cryptocurrency, behind bitcoin) and Ripple.
Currently, the biggest competitor to bitcoin is alleged to be Litecoin. They are very similar in terms of their coding, it differs because it allows for the approval of a mined block, every two and a half minutes, as opposed to every ten minutes with bitcoin. Furthermore, bitcoin has a maximum number of coins that can be created at twenty-one-million bitcoins, whereas Litecoin has a maximum number of eighty-four-million. It has also a different proof-of-work method, which makes it harder for small groups of individuals to dominate the Litecoin blockchain.