The release of Bitcoin and its open-source code in 2008 paved the way for thousands of other cryptocurrencies to be created. These new coins have been dubbed ‘alternative coins’ or ‘altcoins’ as they are alternatives to Bitcoin.
While some do serve a similar purpose to Bitcoin, other cryptocurrency types such as altcoins actually encompass a wide range of different uses. For example, Ethereum (ETH), the world’s first programmable blockchain, enables developers to build and deploy decentralised applications (DApps) and smart contracts.
IOTA is specifically designed to be a new data transfer and transaction settlement layer for the machine economy and the Internet of Things (IoT).
IOTA also uses its own proprietary distributed ledger technology called the Tangle.
Litecoin (LTC) is a peer-to-peer currency and global payment network similar to Bitcoin. In fact, Litecoin’s creator Charlie Lee states that his intention was for Litecoin to be a complementary cryptocurrency to Bitcoin.
Like Bitcoin, all altcoins are able to operate independently on their own networks utilising distributed ledger technology (DLT). The most famous and commonly used type of DLT is blockchain technology, which was introduced to the world by Satoshi Nakamoto via Bitcoin. While all coins use DLT, variations in the underlying code of each protocol are what gives altcoins their own unique attributes.
There are at least 856 altcoins in existence according to data from CoinMarketCap, and the top 5 altcoins by market cap are Ethereum, Ripple (XRP), Bitcoin Cash (BCH), Litecoin, and EOS.IO (EOS).