The massive success of Bitcoin as the first peer-to-peer digital cryptocurrency propelled a chain reaction of launches claiming to be a better alternative to the premier cryptocurrency. Many other peer-to-peer digital currencies have emerged in an attempt to emulate that success. Being an alternative to the original Bitcoin, these cryptocurrencies are collectively referred to as Altcoins; ‘alt’ signifying alternative, and coin signifying (in essence) ‘cryptocurrency’. Beginning in 2011 with Namecoin, the earliest notable alternate cryptocurrency, there have been more than 1500 altcoins on the internet as of May 2018.
While Bitcoin was the first cryptocurrency and remains the best-known, it is now only one of the hundreds of cryptocurrencies, which all seek to improve upon Bitcoin in various ways.
Most altcoins are built around the basic framework provided by Bitcoin, and later also by Ethereum.
Thus most altcoins are peer-to-peer, involve a mining process by which users solve problems to complete blocks, and offer efficient and cheap ways to carry out transactions on the web. But even with many overlapping features, altcoins vary widely from each other – altcoins differ themselves from Bitcoin with a range of procedural variations, including different proof-of-work algorithms, different means by which users can sacrifice energy to mine blocks, and application enhancements to increase user anonymity.
Namecoin was based on the Bitcoin code and used the same proof-of-work algorithm. Namecoin is also limited to 21 million coins, like Bitcoin. Namecoin primarily diverged from Bitcoin by making user domains less visible, allowing users to register and mine using their own .bit domains, which was intended to increase anonymity and censorship resistance.
Current leading examples of altcoin include Litecoin, Dogecoin, Ethereum (2nd to Bitcoin in market capitalization as of May 2018), and Ripple. Litecoin is seen as the closest competitor to Bitcoin.
Every currency on the internet which is not Bitcoin is an altcoin. New altcoins can be created at any time; additionally, there are many older altcoins which are no longer on the market.