What is an Altcoin?
In the beginning, there was only Bitcoin, created by the mysterious Satoshi Nakamoto.
But since Bitcoin was released as open-source software, it didn’t stay alone for long.
Open source means the software’s “source code” – the instructions that make it work – is freely available to anyone. Developers can inspect it, run it, copy it, change it, or enhance it however they like.
Think of it like sharing a recipe. If you had access to a famous dish’s secret formula, you could tweak it, improve it, or even create your own version.
For example, everyone knows how tasty KFC’s fried chicken is thanks to Colonel Sanders’ secret recipe of 11 herbs and spices. 😋
But that recipe is proprietary, meaning it’s locked away and protected. If you wanted to make the same fried chicken, you’d have to reverse-engineer it, which would likely result in… GFC – Gross Fried Chicken. 🤢🤣
Now imagine if Colonel Sanders did share his recipe with the public and said, “Go ahead, improve it!” That would make it open source.
That’s exactly what Satoshi did with Bitcoin—he shared the full code with the public.
Thanks to this, others didn’t have to build a cryptocurrency from scratch. They could simply copy, change, and release their own version.
These new versions of Bitcoin became known as altcoins.
So… What Is an Altcoin?
The term “altcoin” is short for “alternative coin”—any cryptocurrency that isn’t Bitcoin.
Altcoins are considered alternatives because they attempt to improve on or serve different purposes than Bitcoin. Thanks to Bitcoin’s open-source nature, developers all over the world have experimented by copying or tweaking the original codebase.
The first altcoin ever created was Namecoin (NMC), which aimed to provide a decentralized DNS (domain name service) system. It allowed for “.bit” domain names, independent of centralized control (like ICANN). Unfortunately, it was too difficult for the average user to adopt, and didn’t gain much traction.
But it set the stage. Soon, hundreds—and eventually thousands—of altcoins followed.
Some were nearly identical clones. Others made small improvements. Many failed to gain users and were quickly abandoned—these became known as “shitcoins”: worthless coins with no real value or use.
But not all altcoins were failures. Some offered real innovations or improvements, earning dedicated communities and long-term support.
Examples of Notable Early Altcoins
Litecoin (LTC)
Created in 2011 by Google engineer Charlie Lee, Litecoin was designed as a “lighter” version of Bitcoin. It offered faster transaction times (2.5 mins vs. Bitcoin’s 10), used a different mining algorithm (Scrypt instead of SHA-256), and had a larger max supply (84 million coins).
Charlie described it as “silver to Bitcoin’s gold.”
Dogecoin (DOGE)
Launched in 2013 as a joke, Dogecoin was based on a popular Shiba Inu meme and originally intended to be fun and friendly. Despite its humorous start, it gained a loyal fanbase and became the first “meme coin” (and “dog coin”).
Interestingly, Dogecoin was based on Litecoin’s code, not Bitcoin’s.
Ripple (XRP)
Ripple, originally launched as OpenCoin in 2012, aimed to revolutionize international money transfers. Sending money across borders traditionally takes days and incurs high fees. Ripple’s network allowed banks to settle transactions in seconds using XRP, at much lower cost.
XRP is the native cryptocurrency of the XRP Ledger, Ripple’s public blockchain.
Stellar (XLM)
Co-founded by Jed McCaleb (a Ripple co-founder), Stellar shared a similar goal: cheap and fast cross-border payments. But while Ripple focused on bank-to-bank transactions, Stellar initially targeted individuals, especially the “unbanked” population in developing countries.
Stellar’s native token is Lumens (XLM). It can process thousands of transactions per second, far outpacing Bitcoin’s 5 TPS.
Over time, Stellar shifted focus from financial inclusion to helping financial institutions connect via blockchain.
Ethereum (ETH)
No altcoin list is complete without Ethereum.
Launched in 2015 after being conceived in 2013, Ethereum aimed to broaden blockchain’s potential. Unlike earlier altcoins that simply served as alternative digital currencies, Ethereum was designed as a programmable platform.
This meant developers could build decentralized applications (dApps) and even launch their own tokens on the Ethereum network.
While Bitcoin is still king in terms of store of value, Ethereum opened the door to a whole new use case for blockchains beyond digital money.
Ethereum’s native token is Ether (ETH), and it’s the second largest cryptocurrency by market cap, right behind Bitcoin.
In Summary
Altcoins are any cryptocurrencies that aren’t Bitcoin. They emerged because Bitcoin’s source code was made open-source, allowing anyone to copy, improve, or build upon it.
Some altcoins tried (and failed) to make better versions of Bitcoin. Others carved out unique use cases like faster payments, decentralized apps, or financial inclusion.
Now that you know what altcoins are, we can dive deeper into specific categories or “genres” of altcoins in the next section.
