What are Altcoins?

What are Altcoins?

TL;DR:

• Altcoins are any cryptocurrencies that are not Bitcoin. There are thousands of these alternative coins, including well-known examples like Ethereum, Tether, and Dogecoin.

• Altcoins serve a wide range of purposes (payments, smart contracts, stablecoins, collectibles, etc.) and often aim to improve upon Bitcoin’s technology or offer new features.

• They can sometimes yield huge returns, especially during crypto market bull runs. However, altcoins are generally more volatile and risky than Bitcoin, so careful research and caution are advised before investing.

Bitcoin may be the first and most famous cryptocurrency, but it’s far from the only one. There are now over 20,000 other cryptocurrencies—commonly referred to as “altcoins” (short for “alternative coins”). In this article, we’ll explain what altcoins are, how they differ from Bitcoin, the types of altcoins out there, and the pros and cons of investing in them.

What Are Altcoins?

In the broadest sense, altcoins refer to any cryptocurrency other than Bitcoin. After Bitcoin’s creation, many new coins and tokens emerged, and all of these alternatives earned the label “altcoin.” Some people use a stricter definition that excludes Ethereum (the second-largest crypto) from the altcoin category, since Ethereum is so prominent it’s almost in a class by itself. Generally, though, Ethereum and every other crypto (Litecoin, Ripple, Solana, etc.) are considered altcoins.

Each altcoin has its own origin story, development team, and community. Many altcoins are created with a specific purpose or to solve a particular problem that Bitcoin doesn’t address. Some altcoin projects turn out to be highly innovative and achieve widespread adoption — which often leads to significant increases in their price over time. However, plenty of altcoins end up being useless, falling out of favor, or even turning out to be scams with no real value. In other words, the altcoin world is high-risk, high-reward: it contains both promising gems and projects that never pan out.

Altcoins vs. Bitcoin

Like Bitcoin, most altcoins rely on blockchain technology – a type of distributed ledger that records transactions across many computers (nodes) around the world. This means altcoins and Bitcoin share the foundational principle of decentralization. However, altcoins typically attempt to improve on Bitcoin or offer services that Bitcoin cannot. They might modify Bitcoin’s code or use a completely different design to achieve these goals.

For example, Litecoin was created from Bitcoin’s source code with a few tweaks. It functions similarly to Bitcoin as a digital payment currency, but Litecoin’s network processes transactions much faster and with lower fees than Bitcoin. This speed and cost improvement is Litecoin’s key selling point over its predecessor.

Beyond payment-focused coins like Litecoin, many altcoins serve very different use cases. Some altcoins power smart contract platforms and decentralized applications (for instance, Ethereum or Solana enable developers to build apps on their blockchains). Others are designed for specific niches: there are altcoins for decentralized finance (DeFi), altcoins representing ownership of digital assets or collectibles (like NFTs), altcoins for powering decentralized exchanges, and even tokens for blockchain-based games or metaverse worlds. The altcoin ecosystem is extremely diverse, with each project innovating in its own way. This variety means that altcoins collectively explore countless applications of blockchain technology, far beyond what Bitcoin was originally created for.

Should I Invest in Altcoins?

Altcoins can present fantastic investment opportunities, but they also come with significant challenges. On the upside, the right altcoin investment can yield extremely high returns — it’s not uncommon to see certain altcoin prices multiply many times over (10x, 100x, or more) during strong market rallies. Getting in early on a successful project can be life-changing financially. However, with thousands of altcoins on the market, it’s very difficult to predict which ones will thrive in the long run. For every altcoin that skyrockets in value, there are many others that stagnate or disappear. This makes investing in altcoins a high-risk, high-reward endeavor.

If you decide to invest in altcoins, it’s wise to be selective and do thorough research. Instead of chasing every new coin that pops up on social media, focus on projects with solid fundamentals and real-world use cases. Look for altcoins that have: a clear purpose, a strong development team, an active user community, and some traction or adoption in their niche. Always do your own research on factors like the coin’s use case, market capitalization, roadmap (future plans and development milestones), and current level of adoption or usage. Checking these details can help you gauge if an altcoin is likely to stick around and grow.

It’s also helpful to learn some basic technical analysis – chart reading and trend analysis – to decide when might be a good time to buy or sell an altcoin. Crypto markets are volatile, and being able to identify patterns or momentum can prevent you from buying at a peak or selling at a low. In summary, treat altcoin investing like any other investment: research thoroughly, understand what you’re buying, and never invest more than you can afford to lose.

Pros and Cons of Altcoins

Like any investment, altcoins have their advantages and disadvantages. Here’s a quick look at some of the major pros and cons:

Pros:

• Innovation and Early Adoption: By investing in altcoins, you’re often getting involved in cutting-edge technology and ideas. The crypto and blockchain space is evolving rapidly, and much of this innovation happens through altcoin projects. Investors in altcoins are often early adopters of exciting new applications of blockchain tech.

• High Return Potential: Altcoins, especially smaller-cap coins (with relatively low market value), have the potential for explosive growth. In bull markets, some altcoins can surge in price much more dramatically than Bitcoin. Early investors in a successful altcoin can see far greater percentage returns compared to investing in established assets like Bitcoin.

• Advanced Features: Many altcoins offer features beyond what traditional money or even Bitcoin can do. For example, some altcoins let holders participate in governance (voting on network changes or project decisions), earn passive income through staking (locking up coins to support the network), or use decentralized services (like borrowing/lending in DeFi). This means investing in certain altcoins isn’t just about potential price gain, but also about accessing novel financial services or influencing project direction.

Cons:

• Market Volatility: The altcoin market is extremely volatile. Prices can swing wildly up or down in a matter of hours or days. An altcoin might double in price one week, then plummet the next. Sometimes these swings are driven by overall market trends, and other times by hype and speculation (for example, a meme coin skyrocketing after a celebrity tweet, then crashing later). This volatility means altcoin investments can be stressful and risky, especially for inexperienced investors.

• Complexity and Learning Curve: Buying, trading, and securely storing altcoins can be more complex than dealing with traditional investments. Using cryptocurrency often requires above-average computer and internet knowledge. While major crypto exchanges have made it easier to purchase popular coins, some altcoins (especially very new or small ones) might only be available on decentralized exchanges (DEXs) or require setting up special wallets. Managing your own crypto wallet, keeping your private keys safe, and navigating different trading platforms can be challenging for beginners.

• Higher Risk (Scams and Failures): The altcoin space is less regulated and more experimental, which unfortunately means there are scams and poorly run projects out there. It’s possible to invest in an altcoin that later collapses due to fraud, hacks, lack of development, or simply because it didn’t catch on. Unlike Bitcoin and a few top coins, many altcoins have a real chance of going to zero in value. This risk makes it crucial to do due diligence and be skeptical of projects that sound too good to be true.

Types of Altcoins

Not all altcoins are the same. In fact, “altcoin” is a broad term that includes a variety of crypto assets with different structures and purposes. Here are some common categories of altcoins you should know:

• Utility Tokens: These tokens are designed to be used within a specific platform or application, essentially functioning like a digital coupon or currency for that service. Utility tokens often grant holders access to particular features, or let them pay for fees and services on a blockchain platform. Example: On crypto exchanges like Binance, the BNB token is used to pay transaction fees at a discounted rate, making it a utility token.

• Stablecoins: Stablecoins are cryptocurrencies with their value pegged to an external reference to keep their price stable. Most stablecoins are tied 1:1 to a fiat currency such as the US Dollar (for example, 1 stablecoin = 1 USD), though some are pegged to other assets like gold. Because of this peg, stablecoins aim to avoid the volatility seen in other cryptos. They are commonly used for transferring value or parking funds in crypto without exiting to traditional money.

• Non-Fungible Tokens (NFTs): Technically, NFTs are a class of altcoin (though they function a bit differently from currencies). An NFT is a unique digital token that represents ownership of a specific item or piece of content, often digital art, collectibles, or virtual real estate. Non-fungible means each token is one-of-a-kind and not interchangeable on a one-to-one basis. NFTs have become popular for things like digital artwork (think Bored Ape Yacht Club or CryptoPunks), in-game items, and virtual land.

• Governance Tokens: These are tokens that confer voting rights in a crypto project or decentralized organization. Holding a governance token allows an investor to help shape the future of the project by voting on proposals (for example, changes to the protocol’s rules or how a treasury is used). Governance tokens are common in decentralized finance platforms and other community-run projects, giving users a say in decision-making proportional to the amount of tokens they hold.

• Security Tokens: A security token is essentially a digital form of a traditional investment asset, like stocks, bonds, or other securities, that lives on a blockchain. These tokens often represent ownership shares or rights to dividends/profits in an enterprise. Because they derive value from an external asset and may promise returns, they are typically subject to securities laws and regulations. Security tokens aim to combine the benefits of blockchain (like easy transfer and fractional ownership) with the stability of real-world assets.

Popular Altcoins

To put altcoins into context, here are a few of the most popular and noteworthy altcoins today, each illustrating a different aspect of the crypto market:

• Ethereum (ETH) – Ethereum is the largest altcoin and the second-largest cryptocurrency overall. It’s a decentralized platform for running smart contracts and decentralized applications (dApps). Developers can build all sorts of applications on Ethereum (from DeFi protocols to games and NFTs), and Ether (ETH) is the native coin used to pay for transactions and computational services on the network. Ethereum’s innovation was to expand blockchain use beyond simple payments into a whole ecosystem of applications, making it fundamental to the crypto industry.

• Tether (USDT) – Tether is the world’s biggest stablecoin. It’s pegged to the US Dollar, meaning 1 USDT is intended to always be worth roughly $1. Traders and investors use Tether as a stable place to park funds when moving in and out of different cryptocurrencies without converting back to real dollars. USDT plays a crucial role in crypto markets by providing liquidity and a stable trading pair. (Other similar USD-pegged stablecoins include USDC and BUSD.)

• Polkadot (DOT) – Polkadot is a blockchain platform focused on interoperability and scalability. Its goal is to allow many different blockchains to work together in a unified network. Polkadot’s design lets specialized blockchains (called “parachains”) connect to a central hub (the Relay Chain), making it easier to transfer data and assets between chains. The native token, DOT, is used for staking (securing the network), governance (voting on upgrades), and connecting new chains to the Polkadot network.

• Chainlink (LINK) – Chainlink is a decentralized oracle network. In blockchain systems, oracles are services that provide real-world data to smart contracts. (For example, a smart contract might need to know stock prices or weather data to execute an agreement.) Chainlink uses a network of nodes and its LINK token to fetch and verify data from outside sources and deliver it on-chain. This allows smart contracts on platforms like Ethereum to interact with real-world information in a secure way. LINK tokens are used to pay node operators for retrieving data and ensuring its accuracy.

• Dogecoin (DOGE) – Dogecoin is a well-known meme coin that started as a lighthearted joke but became incredibly popular. It runs on its own blockchain (a fork of an early Litecoin codebase) and has an active, friendly community. DOGE features a Shiba Inu dog as its logo (based on the “Doge” internet meme). Despite its funny origins, Dogecoin gained real-world usage for things like online tipping and charity fundraising due to its low transaction fees. In recent years, it’s seen massive price surges largely due to internet hype and celebrity mentions. Some businesses have even started accepting DOGE for payments because of its popularity.

• Solana (SOL) – Solana is a high-performance blockchain platform for smart contracts and dApps, similar in purpose to Ethereum but with a focus on speed and low fees. Solana uses a unique consensus mechanism (combining Proof of Stake with a system called Proof of History) that allows it to process thousands of transactions per second, far more than Ethereum’s current capacity. The SOL token is used to pay transaction fees on Solana and for staking to support network security. Solana has become popular for applications like decentralized finance, NFTs, and other blockchain projects that benefit from fast transactions.

• Decentraland (MANA) – Decentraland is a metaverse platform built on Ethereum. It’s a virtual world where users can buy, own, and develop parcels of virtual land, as well as create and monetize content and applications within the world. The land and items in Decentraland are represented by NFTs, and MANA is the cryptocurrency token used as the in-world currency. With MANA, users can purchase land, goods, and services in Decentraland’s digital universe. Decentraland showcases how altcoins and blockchain technology can extend into virtual reality and gaming, creating decentralized digital spaces owned by their users.

How to Buy Altcoins on Jittie.com

Buying Bitcoin and altcoins on Jittie.com is simple and beginner-friendly. Jittie offers several features that make the process quick, flexible, and secure:

Instant Buy – Quick Crypto Purchases Starting at $10

Jittie’s Instant Buy feature allows you to purchase cryptocurrency in seconds, without complex trading screens. You can start with as little as $10, making crypto investing accessible even if you’re on a small budget . This is perfect for beginners who want to dip their toes into Bitcoin or other altcoins without a large upfront investment. Simply choose the coin you want (e.g., Bitcoin or any supported altcoin), enter the amount (even small amounts), and confirm your purchase. Jittie will instantly execute the buy for you, and the crypto will appear in your account right away.

Lock and Pay – Secure a Price Now, Pay Later

Jittie’s unique Lock and Pay feature lets you buy now and pay later for crypto. This means you can secure the current price of a Bitcoin or altcoin by paying a small portion upfront, then pay the rest over time – interest-free . For example, you might pay only 20% of the purchase price today to “lock in” the price, and then pay the remaining amount in a few installments. Jittie will immediately purchase 100% of the crypto for you at that locked-in price and hold it for you while you complete the payments . Once you’ve paid in full, the crypto is fully yours. Lock and Pay is great if you find a good price but don’t want to spend the entire amount at once – you won’t miss out on a market dip, and you avoid volatility risk since the price is secured upfront . All of this happens without any interest or hidden fees, making it a beginner-friendly way to invest in crypto at your own pace.

Dollar-Cost Averaging (DCA) – Invest Gradually Over Time

If you’re nervous about market ups and downs, Jittie supports a Dollar-Cost Averaging (DCA) strategy to help reduce risk. DCA means investing a fixed smaller amount on a regular schedule (for example, buying $10 of Bitcoin or Ethereum every week) instead of investing a lump sum all at once. Jittie makes it easy to implement this by allowing you to make recurring or repeated purchases of your favorite altcoins over time. By spreading out your buys, you average out the cost of your purchases and lower the impact of short-term price swings . This way, if prices are high one week and low the next, you end up paying an average price over the long run. Many beginners like this approach because it builds a position in crypto gradually and smooths out volatility, and Jittie’s low minimum purchase amount (just $10) is ideal for starting a DCA plan.

Apple Pay Integration – Seamless One-Tap Purchases

For maximum convenience, Jittie.com integrates directly with Apple Pay in the Jittie app. You can buy crypto using Apple Pay just as easily as making any in-app purchase . There’s no need to manually enter card details or switch to another payment method – simply use Apple Wallet on your iPhone to confirm the transaction with Face ID or Touch ID. This integration means your crypto purchase is completed in one tap, providing a fast and secure checkout experience. For example, if you’re using Instant Buy to grab some Bitcoin, you can choose Apple Pay at checkout and complete the whole purchase in seconds . It’s a seamless process, which is especially helpful for newcomers who want an easy and familiar way to pay. Plus, all of Jittie’s security measures still apply, so your transaction is safe while being ultra-convenient.

Summary

Altcoins are essentially all the alternative cryptocurrencies beyond Bitcoin, and they make up the vast majority of the crypto market in terms of number. This altcoin realm is where much of crypto’s innovation happens — from smart contract platforms and DeFi protocols to meme coins and metaverse tokens. Altcoins offer investors a chance to get in early on novel technologies and potentially reap huge gains if those projects succeed. However, they also carry higher risks and volatility, as many projects won’t stand the test of time. Bitcoin may remain the most dominant and well-known crypto, but the growing universe of altcoins has become a force of its own, driving the crypto industry forward with new ideas, opportunities, and challenges. With a solid understanding of what altcoins are and careful research, investors can navigate this exciting space more confidently.