Altcoin

An altcoin is any cryptocurrency that is not Bitcoin. The word is short for "alternative coin," and it caught on in the early 2010s, when projects like Litecoin and Namecoin copied Bitcoin's code with a few changes. Today it covers everything from large networks with real usage to tokens created in minutes by a single person.

Mechanically, altcoins come in two main forms. Some are the native coin of their own blockchain, like ETH on Ethereum or SOL on Solana, and they pay network fees and help secure the chain. Others are tokens issued by a smart contract on an existing chain, such as ERC-20 tokens on Ethereum or SPL tokens on Solana. Traders often call both altcoins, but the difference matters: a token inherits the host chain's security while also depending on the code and owner permissions of its own contract.

For someone buying or holding, the main thing to know is that altcoins usually have thinner liquidity and sharper price swings than Bitcoin. They also tend to move in the same direction as Bitcoin, only by larger percentages, in both rallies and drops. A small token can be pushed around by a handful of wallets, and a gain on your screen may not be sellable at that price if the liquidity pool is shallow.

Some things to check before buying: market cap compared to actual liquidity, how much of the supply sits in the top wallets, whether team and insider tokens are vested or locked, and whether the contract can mint new supply or change fees. Do not compare tokens by price per unit, since a low price says nothing about being cheap. Also watch for copycat names and tickers, because anyone can deploy a token with the same name as a well-known one. Many altcoins lose most of their value over a full market cycle and never recover, so how long a token has survived is itself useful information.