Altcoin
An altcoin is any cryptocurrency other than bitcoin. The word lumps everything together, from Ethereum, the second largest network, to a token minted yesterday as a joke, so on its own it says nothing about quality.
How it works
Some altcoins are their own blockchains with their own economics and security: Ethereum, Solana, Cardano. Others are tokens living inside someone else's network, which need no miners or validators at all, just a deployed smart contract.
That difference drives the risk. A standalone network has nodes, developers and a cost of attacking it. A token has only its contract and its team behind it, and issuing one costs a few dollars.
Altcoin prices track bitcoin closely: they usually fall harder on its declines and lag on its rallies until capital starts rotating into them. Hence the talk of an "altcoin season".
How the market is split
The orders of magnitude worth holding in mind when comparing projects.
| Bitcoin's share of market cap | ≈ 50–60% |
| Ethereum's share | ≈ 10–15% |
| Everything else | ≈ 25–40% |
Those last percent are split across tens of thousands of coins, the vast majority with neither volume nor users. "Thousands of projects" in practice means a few dozen live ones and a very long tail.
How to tell them apart
- Own network or tokenThe first question about any project. A token inherits its host network's security and has none of its own.
- Volume, not market capA cap in the hundreds of millions on volume in the tens of thousands means nobody exits at that price.
- Who holds the supplyA handful of wallets holding half the supply is not an investment, it is a bet on how they behave.
- What the project does todayA roadmap describes intentions. A working product with real users describes facts.