The world of cryptocurrencies is still in its teenage years and undergoing new innovations and technological advances each year. It all started with the introduction of bitcoin back in 2008-09. Later, several new cryptocurrencies began entering the crypto market, and the name used to collectively address all the cryptocurrencies other than Bitcoin is Altcoins. Currently, in the crypto market, there are thousands of altcoins, but, when it comes to market capitalisation, Bitcoin still remains the undefeatable king of the crypto kingdom. In this blog let’s learn about what bitcoin is, what altcoins are, and what are the differences between altcoins and bitcoin.

What is bitcoin?

As we all know, Bitcoin (BTC) is the first ever cryptocurrency. It was introduced by an unknown entity called Satoshi Nakomoto in 2008 in a whitepaper. Next year, in 2009, it was made available for the public. Bitcoin is a currency with no regulations by governments or central banks, and took a decentralised approach. Bitcoin is built on a blockchain network which is a series of connected computers called nodes, where transactions are captured and recorded. The transaction data is available for anyone within the network to check and verify, thereby ensuring safety and credibility. To this day, even after thousands of altcoins are introduced to the market, Bitcoin hasn’t lost its significance, remaining the biggest traded cryptocurrency with the highest market cap. But, there are issues with the speed and expensiveness connected with the mining and transactions of bitcoins. And it was to address these issues and come up with better technology that altcoins were introduced.

What are altcoins?

The term “altcoin” is formed by blending two words – “alternative” and “coin”. Altcoins are crypto coins other than bitcoin, such as Litecoin, Zcash, Ether, Monero, etc. Namecoin (NMC) was the first altcoin developed, back in April 2011, and by December 2023, there are more than eight thousand altcoins in circulation. In October 2011, Litecoin came into existence, and still remains one of the most traded crypto coins.

There are many types of altcoins, such as utility tokens, governance tokens, meme coins, payment tokens, stablecoins, and security tokens. Utility coins are meant to be used to avail of services from within a blockchain network. Governance tokens are meant to allow certain authority to the holders within the crypto project. Meme coins are normally introduced as a joke to make fun of cryptocurrencies, but often take a life of its own, especially when celebrities like Elon Musk tweet about them. Stablecoins are meant to fight volatility by getting pegged to fiat currencies like the US dollar, or commodities like gold, or other cryptocurrencies like the Bitcoin.