What is an Altcoin?

What is the definition of an altcoin?

Altcoin (alternative coin) is a term that’s often used to describe any cryptocurrency coin that is not Bitcoin. The term also includes the projects and distributed ledgers on which the so-called altcoins are based. For example, Solana, the public distributed ledger on which SOL (the native cryptocurrency of Solana) is based, is sometimes referred to as an altcoin network, altcoin blockchain or altcoin ledger. Or, in an especially lazy reference, even though Solana is the ledger and SOL is its native cryptocurrency, some people refer to Solana (the network) as just an altcoin.

Is Ether an altcoin?

As a form of classification, the general idea is that all other coins besides Bitcoin should be considered as Bitcoin alternatives. However, given the increasingly widespread acceptance of Ether (ETH), the native cryptocurrency of the Ethereum public distributed ledger, references to ETH as an altcoin are beginning to wane. At the time this glossary entry was written, the designation of Bitcoin and ETH as “coins” versus all other cryptocurrencies as altcoins was structurally aligned to indications from the US Securities and Exchange Commission (SEC) that Bitcoin and Ethereum should be viewed as commodities. Meanwhile, the remaining altcoins should be considered as securities (an unresolved issue that’s the subject of vigorous debate among lawmakers and regulators).

What is the relevance of altcoin to enterprises and other businesses?

As alternatives to Bitcoin and Ethereum, various altcoin networks are often designed to attract community and application development on the basis of differentiated technical features and unique value propositions. Relative to Bitcoin, one of Ethereum’s key differentiators was its support for software developers looking to programmatically unlock the underlying capabilities of a public distributed ledger with custom-developed applications known as smart contracts. Developer interest in smart contracts helped give rise to a range of altcoin networks that differentiated themselves from Ethereum’s smart contract capabilities in terms of performance, cost, supported programming languages and energy consumption.