What is an altcoin? How is it different from Bitcoin?

Altcoins are all cryptocurrencies outside of Bitcoin, designed to improve bitcoin’s flaws or expand new features. They are mainly divided into smart contract platforms, payment types, privacy coins, stablecoins and Meme coins to meet different needs.

Mainstream currency exchanges in 2025:

Ouyi OKX:

Binance Binance:

Huobi:

Gateio Sesame Opening:

bitget:

What is Altcoin?

Altcoin is the abbreviation of "Alternative Coin" and refers generally to all other cryptocurrencies except Bitcoin (BTC). They usually borrow the basic technologies of Bitcoin (such as blockchain), but through improvements or innovations, they try to solve certain limitations of Bitcoin (such as transaction speed, functional expansion, etc.), or design for specific application scenarios.

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Six core differences between altcoins and Bitcoin

Contrast dimensions	Bitcoin (BTC)	Altcoin
Founding goals	As "digital gold", a peer-to-peer electronic cash system	Improve the flaws of Bitcoin, or expand new features (such as smart contracts)
Technical differences	Based on PoW (Proof of Work), slow transaction speed (7 TPS)	PoS, DPoS and other mechanisms may be used, which is faster (such as SOL 50,000 TPS)
Functional extension	Only basic transfers are supported	Supports smart contracts, DeFi, NFT, games, etc. (such as ETH, BNB)
Supply	Total volume of 21 million, deflation model	Most of them have no hardtops, or set higher upper limits (such as ETH without upper limits, BNB destruction mechanism)
Market position	Market value accounts for about 40%-50%, an industry benchmark	Smaller market value and higher volatility (easy to hype)
Decentralization degree	Completely decentralized	Some projects are controlled by the team or foundation (such as XRP, SOL)

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The main types of altcoins

1. Smart contract platforms (such as ETH, SOL, AVAX)

   • Supports the development of decentralized applications (DApps), which is the underlying infrastructure of DeFi and NFT.

2. Payment-type altcoins (such as LTC, XLM)

   • Emphasizes fast and low-cost transfers, and benchmarks against Bitcoin's payment function.

3. Privacy coins (such as XMR, ZEC)

   • Enhance anonymity through encryption technology.

4. Stable coins (such as USDT, USDC)

   • Anchor the fiat currency price, used for transaction hedging or cross-border payments.

5. Meme coins (such as DOGE, SHIB)

   • Rely on community culture and hype without actual technical support.

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Why do you need altcoins?

1. Solve Bitcoin’s shortcomings: For example, Ethereum introduces smart contracts to realize more complex blockchain applications.

2. New experimental technologies: such as PoS (proof of stake), sharding, etc., to improve scalability.

3. Vertical applications: such as Filecoin (storage), Chainlink (oracle), Render (computer power), etc.

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Risk warning

• High volatility: The price of altcoin is much more volatile than Bitcoin, and may rise and fall sharply.

• Zero risk: Most altcoins have a short life cycle and may be due to technical failure or supervision disappear.

• Speculation: Some projects are driven by marketing and have no substantial value (such as most Meme coins).

Summary: Bitcoin is the "gold standard" of cryptocurrencies, and altcoins try to innovate or break through in segments based on it. Investment requires careful research on project background and technical essence!

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