What are altcoins?

What are altcoins? A simple definition

Altcoins are any cryptocurrencies apart from bitcoin. If you're looking at blockchain-based currencies that aren't bitcoin, you're dealing with altcoins.

New coins appear often. Some, like Ethereum, have been running for years, while others come and go quickly, seeing little use. Developers might make an altcoin to cut transaction times, shrink costs or try more private transfers. Others aren’t designed for payments at all, some run smart contracts, others give you a way to use a product or service. Bitcoin still dominates the market, but altcoins fill nearly every other niche. By the way, the question of whether a coin is technically a token is different. For details there, see our guide to coin vs token.

The main groups of altcoins

Altcoins fall into groups based on what they're built to do. The boundaries blur, and one coin can check more than one box. Some main groups are:

• Smart-contract platforms (Ethereum is the best-known), which let people build and use new blockchain applications.
• Payment coins, aiming for speed and low cost when you send money.
• Utility tokens, giving you entry to a particular digital product or platform service.
• Meme coins, created for hype or community buzz rather than a concrete function.

That category label tells you what founders hope to achieve, not whether it really works as promised. Check a project’s own documentation and code before taking those claims at face value. For coins tied in value to another asset, see our article about what stablecoins are.

Extra considerations before buying altcoins

Most altcoins see less trading than bitcoin, so you might have trouble getting a fair price if you need to buy or sell in any size. Wide gaps between bid and ask, and sharp moves on low volume, aren’t unusual, that gap is called slippage. There are also coins that trade only on a couple of smaller exchanges, which might make it hard to exit your position at all.

Expect sharper swings than you’d find in bitcoin, too. Many altcoins lose most of their value or disappear. You could lose what you put in. If you decide to proceed, look for open information on team members, the design, coin supply and business plan. Remember: a trading platform can list a coin without checking it. If you want context, market size is one early signal; see our look at crypto market cap.

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