What is an altcoin? The top 10 altcoins you should know about

Understanding Altcoins: What They Are and How They Differ from Bitcoin

Picture a world where Bitcoin is just the starting point of digital currency. That’s the reality in the cryptocurrency universe. While Bitcoin remains the original and most prominent cryptocurrency, thousands of other digital currencies have emerged since its creation in 2009. Collectively, these alternatives are known as “altcoins.”

The word “altcoin” blends “alternative” and “coin,” referring to any cryptocurrency that isn’t Bitcoin. Much like there are different types of vehicles for various needs, altcoins exist to address specific problems or provide features that Bitcoin doesn’t offer.

Litecoin, the first altcoin, launched in 2011 with the aim of processing transactions more quickly than Bitcoin. Today, the crypto ecosystem features over 16,500 cryptocurrencies, each with its own unique purpose and characteristics. While Bitcoin currently represents about half of the total crypto market, altcoins make up the other half, highlighting their increasing importance in the digital economy.

To truly understand altcoins, it’s essential to clarify some basic crypto concepts.

A “coin” is a cryptocurrency that runs on its own blockchain network. Bitcoin operates on the Bitcoin blockchain, Ethereum on the Ethereum blockchain, and so forth. These are native coins for their respective blockchains.

An “altcoin” is any cryptocurrency other than Bitcoin. In some contexts, people use “altcoin” to describe any crypto that is neither Bitcoin nor Ethereum, as these two are the largest and most established.

A “token” is a cryptocurrency that runs on another blockchain rather than its own. For instance, many tokens leverage the Ethereum network’s infrastructure but serve different functions.

Altcoins generally fall into two categories:

1. Altcoins based on Bitcoin’s code, but modified to include new features
2. Altcoins created from scratch with entirely different code and operating mechanisms

Most altcoins seek to improve on Bitcoin’s limitations, such as transaction speed, energy consumption, privacy, or versatility. Each one offers a unique value proposition that sets it apart from Bitcoin and other cryptocurrencies.

Types of Altcoins: From Stablecoins to Meme Coins

The altcoin landscape is highly diverse, with several distinct categories that perform different roles within the crypto ecosystem.

Stablecoins

Stablecoins are designed to minimize price volatility by pegging their value to stable assets like the US dollar or gold. Examples include USDC, USDT (Tether), and DAI. Unlike most cryptocurrencies, stablecoins aim for price stability, making them practical for daily transactions and as a “safe haven” during market swings.

Utility Tokens

Utility tokens grant access to services within a particular blockchain network. They act as digital keys that unlock features or services on a platform. XRP, used for cross-border payments, and MATIC, which enables fee payments on the Polygon platform, are examples of utility tokens.

Payment Tokens

Payment tokens are altcoins developed specifically as currencies for value exchange. They focus on being efficient mediums of exchange, offering fast transaction times and low fees.

Governance Tokens

Governance tokens give holders the right to vote on decisions affecting blockchain projects. Holding these tokens lets you vote on protocol changes, much like shareholders vote in companies. Maker (MKR) is a prominent example, allowing holders to influence MakerDAO platform decisions.

Security Tokens

Security tokens represent ownership of external assets, similar to traditional securities. They may represent company shares, real estate units, or other investments, and are usually regulated as securities.

Meme Coins

Meme coins began as jokes or social commentary but became popular through community support. Dogecoin (DOGE) and Shiba Inu (SHIB) are famous examples, both starting as internet memes and growing massive fan bases. These coins often have huge or unlimited supplies, resulting in lower per-unit prices.

Play-to-Earn Tokens

Play-to-earn tokens power blockchain-based games where players earn crypto rewards by playing. Axie Infinity is a top example, letting players breed, raise, and battle fantasy creatures to earn tokens convertible to other currencies.

Top Altcoins and Their Use Cases

While thousands of altcoins exist, only a few have become market leaders based on utility, adoption, and market cap. Here are some of the most influential altcoins in the crypto ecosystem:

1. Ethereum (ETH)

Ethereum is the largest altcoin by market cap. Unlike Bitcoin, which mainly acts as digital money, Ethereum introduced programmable smart contracts that execute automatically when conditions are met. This innovation enabled thousands of applications on its platform, from finance to gaming and digital art marketplaces.

2. XRP

Created by Ripple Labs, XRP is designed for fast, low-cost international money transfers. It aims to help financial institutions improve cross-border payments, offering an alternative to legacy systems like SWIFT.

3. Solana (SOL)

Solana is known for its ultra-fast transaction speeds and low fees. Its blockchain can handle thousands of transactions per second, making it ideal for high-throughput uses like trading platforms and games.

4. Cardano (ADA)

Cardano takes a research-based approach to blockchain, emphasizing security and sustainability. It uses a proof-of-stake consensus mechanism, which is far less energy intensive than Bitcoin’s mining process.

5. Litecoin (LTC)

Often called “silver to Bitcoin’s gold,” Litecoin was among the first altcoins, debuting in 2011. It offers faster transaction confirmations and a different hashing algorithm. With a strong track record, Litecoin remains popular for everyday payments due to its low fees and wide acceptance.

6. Dogecoin (DOGE)

Originally a meme-based joke, Dogecoin is now one of the world’s most recognized cryptocurrencies. Despite its lighthearted origins, Dogecoin has built an enthusiastic community and attracted global celebrity support. Its low price and unlimited supply make it popular for tipping and small online transactions.

7. Tether (USDT)

Tether is the largest stablecoin by market cap and maintains a value pegged to the US dollar. Each USDT token is backed by reserves to match its $1 value, making it critical for traders moving between volatile cryptocurrencies and stable assets without converting to fiat. It’s also one of the most traded cryptos by daily volume.

8. USD Coin (USDC)

USDC is a fast-growing, regulated stablecoin pegged to the US dollar. Created by the Centre consortium (launched by Circle and Coinbase), USDC is known for transparency and regular audits of its dollar reserves. It’s become essential infrastructure for DeFi applications and cross-border payments.

9. Shiba Inu (SHIB)

Released in 2020 as a Dogecoin alternative, Shiba Inu rapidly gained broad attention. While it began as a meme coin, the project has expanded to include a decentralized exchange (ShibaSwap), an NFT platform, and more. Its extremely low price per token lets investors buy large amounts, fueling retail popularity.

10. Uniswap (UNI)

Uniswap transformed crypto trading with its automated market maker model. As one of the biggest decentralized exchanges, it lets users swap tokens directly from their wallets, without intermediaries. UNI holders can participate in governance decisions about the protocol’s future.

Each of these altcoins offers features and benefits that set them apart from Bitcoin, targeting specific uses and market demands.

Altcoin Dominance and Market Cap: Essential Metrics for Crypto Investors

To make smart investment choices in altcoins, you need to understand two core metrics: altcoin dominance and market capitalization.

Altcoin Dominance

Altcoin dominance is the percentage of the total crypto market value held by all altcoins combined. The formula is:

Altcoin Dominance = (Total Crypto Market Cap – Bitcoin Market Cap) / Total Crypto Market Cap × 100%

When Bitcoin’s dominance falls, altcoin dominance rises, signaling that more capital is flowing into alternative cryptocurrencies.

The altcoin dominance chart is a valuable tool for spotting market trends:

• Rising altcoin dominance (usually above 55%) often signals “altcoin season,” when altcoins outperform Bitcoin
• Falling altcoin dominance typically points to a Bitcoin-focused market, where investors prefer the leading cryptocurrency

Historically, altcoin dominance peaked during the 2017–2018 bull run at nearly 67%, and again in mid-2021, when it approached 60%. These times coincided with explosive altcoin price gains.

Altcoin Market Capitalization

Altcoin market cap is the total value of all circulating altcoins. It’s calculated by multiplying each coin’s current price by its circulating supply and adding them together (excluding Bitcoin).

In recent years, total altcoin market cap has grown to major levels, making up about half of the total crypto market.

Watching the altcoin market cap chart gives key insights:

• Consistent growth in total altcoin market cap often shows sustained interest in the broader crypto sector
• Sudden spikes may point to excessive speculation or a market bubble
• Comparing individual altcoin market caps helps gauge their relative significance and adoption

Many investors monitor the ratio between Bitcoin’s and total altcoin market caps to spot potential capital shifts. When funds move from Bitcoin to altcoins, altcoin prices often surge.

Altcoin Season Index: When and Why Alternative Cryptocurrencies Outperform Bitcoin

The crypto market experiences an interesting pattern called “altcoin season” or “altseason.” This refers to periods when altcoins, as a group, outperform Bitcoin—often seeing sharp price increases in a short timeframe.

What Sparks Altcoin Season?

Altcoin seasons usually follow a period when Bitcoin has experienced strong growth and then stabilizes or trades sideways. Investors looking for higher returns may reallocate capital from Bitcoin into altcoins, reducing Bitcoin’s dominance and fueling altcoin rallies.

How to Spot Altcoin Season

The Altcoin Season Index helps investors determine if the market is in altcoin season by measuring:

1. Relative performance: If most altcoins outperform Bitcoin over a set period, it could signal the start of altcoin season.
2. Bitcoin dominance: When Bitcoin’s share of the total crypto market falls, it often means money is moving into altcoins.
3. Trading volume: Increased altcoin trading volumes relative to Bitcoin can signal the start of altcoin season.
4. Social sentiment: Increased buzz around specific altcoins on social media often precedes price rallies.

Historic Altcoin Bull Runs and Patterns

Major altcoin seasons include:

• 2017–2018: Bitcoin dominance dropped from 86.3% to 38.69%, coinciding with the ICO boom.
• 2020–2021: During global economic challenges, retail investors looked beyond Bitcoin, driving the rise of meme coins like Dogecoin and the NFT market.

How Long Do Altcoin Seasons Last?

Altcoin seasons typically last a few weeks to several months, depending on market conditions, investor sentiment, and broader economic factors. They can end as quickly as they start, with prices falling just as rapidly as they rose.

Investing in Altcoins: Potential Rewards and Key Risks

Like any investment, altcoins offer both opportunities and substantial risks that investors need to weigh carefully.

Advantages of Investing in Altcoins

1. Improvements over Bitcoin: Many altcoins are engineered to solve specific Bitcoin limitations, such as transaction speed, energy efficiency, or functionality—potentially giving them technical advantages for certain uses.
2. Higher growth potential: With smaller market caps than Bitcoin, altcoins can deliver higher percentage returns if they succeed. Investing in the right emerging altcoin can outperform a similar investment in Bitcoin.
3. Diversification: With thousands of altcoins available, investors can pick projects that align with specific technologies, sectors, or missions they believe in.
4. Functionality beyond currency: Many altcoins provide features like supporting decentralized apps or enabling governance rights within blockchain projects, beyond just storing value.

Disadvantages of Investing in Altcoins

1. Higher risk: Altcoins typically carry greater risk than Bitcoin. Many projects fail entirely, resulting in lost investments. The smaller the altcoin, the higher the risk.
2. Market volatility: Altcoin prices can swing wildly—20–30% moves in a single day are not uncommon. This volatility can make altcoin investing stressful and hard to time.
3. Lower liquidity: Most altcoins have less trading volume than Bitcoin, making it tougher to buy or sell large amounts without affecting the price.
4. Regulatory uncertainty: Crypto regulation is still evolving. New rules could dramatically impact certain altcoin types, especially those that could be classified as securities.
5. Scams and failures: The altcoin space has seen many scams, failed projects, and rug pulls. Without careful research, investors can fall victim to pump-and-dump schemes or projects that never deliver on promises.

How to Research Altcoins: A Framework for Crypto Project Evaluation

Given the risks, thorough research is vital before investing in altcoins. Here are key factors to consider when assessing potential altcoin investments:

1. Define the Project’s Purpose and Problem It Solves

• What real-world problem does the altcoin address?
• Is there genuine demand, or is it a solution looking for a problem?
• How does it compare with alternatives both inside and outside crypto?

2. Evaluate the Team

• Review the team’s background and experience
• Look for transparency about team members’ identities and skills
• Check for a track record of successful project delivery
• See how many active developers are working on the project

3. Read the White Paper

The white paper explains the cryptocurrency’s technology, goals, and rollout plan. Look for:

• Clear, specific technical details
• A defined roadmap with realistic milestones
• Transparent tokenomics (how tokens are allocated and used)
• Red flags: vague language, unrealistic promises, or poor writing

4. Assess Tokenomics

• What is the total token supply?
• How are tokens distributed (e.g., to the team, for public sale)?
• Is there a mechanism to control inflation?
• Are there lock-up periods for team tokens?

5. Analyze Market Metrics

• Market capitalization: total value of all tokens in circulation
• Liquidity: how easily tokens can be bought or sold without moving the price
• Trading volume: daily token trading activity
• Price history: how has the token performed over time?

6. Community and Adoption

• Community size and engagement on social media, forums, etc.
• Partnerships with established organizations
• Real-world usage and adoption data
• Quality of communication from the project team

7. Security and Audits

• Has the code been audited by reputable security firms?
• Any history of security breaches?
• How decentralized is the network?

By examining these areas, you can make more informed decisions about which altcoins are worth your investment—and which to avoid.

Altcoin Wallet Guide: How to Protect Your Crypto Holdings

Correctly storing your altcoins is vital to protecting your investment. Different storage options offer varying levels of security and convenience.

Types of Crypto Wallets

Hardware Wallets (Cold Storage)

• Physical devices that keep your private keys offline
• Examples: Ledger, Trezor, Tangem
• Offer the highest security—best for large holdings
• Protect against online hacks
• Usually cost $50–$200

Software Wallets

• Desktop apps (e.g., Exodus, Electrum)
• Mobile apps (e.g., Trust Wallet, MetaMask mobile)
• Web wallets (e.g., MetaMask browser extension)
• More convenient than hardware wallets but less secure

Exchange Wallets

• Store assets directly on the exchange where you bought them
• Most convenient but least secure
• Only use for small balances or short-term storage
• The exchange controls your private keys

Paper Wallets

• Printed documents containing your private keys
• Fully offline storage
• Very secure if set up correctly, but hard to use
• Not recommended for beginners

Best Security Practices

1. Never share your private keys or recovery phrases with anyone
2. Write recovery phrases on paper (never digitally) and store them securely
3. Use strong, unique passwords for all crypto accounts
4. Enable two-factor authentication (2FA) with an authenticator app, not SMS
5. Use different wallets—hot wallets for frequent use, cold storage for long-term
6. Keep wallet software updated to fix security issues
7. Be alert for phishing attacks targeting your crypto
8. Consider a dedicated device for crypto transactions
9. Back up your wallet as per the provider’s guidance
10. Start with small test transactions before moving large sums

As crypto experts say: “Not your keys, not your coins.” Taking responsibility for securing your altcoins is essential for anyone in the crypto space.

Conclusion

The altcoin market has evolved continuously since 2011. As the crypto sector matures, projects with real-world utility and applications are likely to succeed, while others may fade away.

For those new to altcoins, thorough research is a must before investing. Learn key market metrics and follow best security practices to protect your holdings.

Whether you’re tracking trends through altcoin dominance or building a diverse portfolio of promising projects, approach altcoin investing with informed caution.

FAQ

What is an altcoin and how is it different from Bitcoin?

An altcoin is any cryptocurrency except Bitcoin. It differs in consensus algorithm, features, and use case. Altcoins often introduce new solutions and specialized capabilities.

Which altcoins are in the top 10 by market cap?

The top 10 altcoins by market cap include Binance Coin (BNB) with around $90 billion in capitalization, Dogecoin (DOGE), and other major projects. These are the market leaders in trading volume and value for 2026.

How do you pick a promising altcoin for investment?

Research the project team, technology, and use case. Check trading volume and market cap. Review the development roadmap and ecosystem. Stay updated with industry news and market trends.

What risks are involved in investing in altcoins?

Altcoins are highly volatile, with prices that can swing sharply. There are regulatory and liquidity risks. Lack of project understanding increases loss risk. Careful analysis is essential before investing.

Ethereum, Ripple, Litecoin—what type of altcoins are they and what are their key features?

Ethereum is a smart contract platform. Ripple is designed for international payments. Litecoin offers fast transactions and lower fees. All three compete with Bitcoin and are leading market players.

How do you buy altcoins on a crypto exchange?

Sign up on an exchange, deposit funds, find the desired altcoin trading pair, enter the amount and price, and confirm the purchase. The altcoins will be credited to your wallet.

What’s the history of altcoin development and their role in the crypto market?

Altcoins emerged after Bitcoin’s success, quickly expanding the crypto universe. They offer new technologies and features, competing with Bitcoin. Today, thousands of altcoins play a crucial role in blockchain innovation and drive significant crypto trading volumes.