Altcoins are any cryptocurrencies that exist in addition to Bitcoin. These alternate coins use decentralized control, a similar method to that of Bitcoin. They also have their own independent blockchain. Altcoins provide an alternative to Bitcoin’s shortcomings and have become increasingly popular since the genesis of Bitcoin.
Altcoins are developed to either fix issues from Bitcoin, implement new features, or simply provide an alternative option to investors wishing to diversify their portfolio. Depending on the coin and the developers’ intentions, some altcoins focus on privacy, others on improved transaction speeds, or are created as a platform for dApps to be built on.
When new altcoins are launched, they often come with their own digital wallet app or compatible blockchain as well as a distinct algorithm, design, coin name, and brand. Bitcoin is most often used as a base currency or trading pair in cryptocurrency exchanges and altcoins usually mimic some of Bitcoin’s behavior while looking to offer better solutions or fill a particular market need.
Altcoin developers are constantly seeking to improve the features of their coin and attract potential investors, retailers, miners, users, and traders. Some of these new coins have the potential to reach very large market caps if they prove successful; however, some may stagnate due to flaws in their code and implementation. That said, many new coins acquire users who wish to be part of early stages of the project and often achieve good returns if the coin succeeds.