Bitcoin….Bitcoin….Bitcoin. Tracking, news, current movements, etc. No matter where you are, what you do, or how much you keep up with cryptocurrency developments, you’ve likely – at the very least – heard of the flagship cryptocurrency. While Bitcoin definitely receives the lion’s share of attention and coverage, many people are starting to realize that there is a whole world of cryptocurrency options waiting to be discovered. Today’s word goes beyond the tip of the crypto iceberg. Welcome to altcoin.
Beginning with the name, altcoin is a combination of the shortened form of alternative and the word coin. Coming directly from the Medieval Latin alternativus, which itself comes from the root alter, meaning ‘other’, our term alternative can essentially be defined as ‘offering one or the other of two or more objects’ and was first used in the 1540 Registrum Secreti Sigilli Regum Scotorum. (The Register of the Privy Seal of Scotland) edited by David Hay Fleming in 1921, which recorded that: “[The] archbishop of Sanctandrois, and..Williame, bishop of Aberdeen, patronise alternative of the said personage.” As for the second term, though there is speculation that it comes directly from the “coin” in Bitcoin, coin, in a more generally applicable sense, comes from the Old French coing, meaning ‘a stamp or piece of money’, and originated as the Latin cuneus, meaning ‘wedge, or (in this case) a part or piece of something’. Though the first usage of the term circa 1350 kept it in the architectural sense of a wedge, it was, by 1386, beginning to be used as terminology for a piece of money, as can be seen in The Clerk’s Tale of Chaucer’s The Canterbury Tales, noting: “Though the coin be fair at eye.”
So, what are altcoins and where do/did they come from? Essentially, at the simplest level, altcoins are alternatives to the Bitcoin cryptocurrency. Given, this may sound trite, but it is true: being the first decentralised peer-to-peer digital currency as well as being highly lucrative, Bitcoin, originally released in 2009, has naturally attracted a lot of attention; however, that doesn’t mean that Bitcoin is the ideal cryptocurrency and free of problems. Seeing the success of Bitcoin as well as the glaring deficiencies, alternatives soon emerged. Although the origin of the term altcoin is seemingly impossible to trace, considering that Bitcoin’s first 2 competitors, Litecoin and Namecoin, were released in 2011, it can reasonably be assumed that the term originates from around this time.
Holding approximately 70% of total cryptocurrency value, Bitcoin is the undisputed heavyweight in the market, but, as stated before, it’s far from perfect – this is where altcoins seek to differentiate themselves and improve on what Bitcoin has done.
Below are some broad examples:
- Payments made with Bitcoin are untraceable; however, the user making the payment is trackable. For some, this provides a glaring privacy/anonymity problem. Some altcoin providers, like Monero, Zcash, and Dash, possess a built-in functionality that provides a greater degree of privacy/anonymity to concerned users.
- Bitcoin’s underlying ledger was constructed in a way that only allows a certain number of transactions in every block, which occurs every 10 minutes. This breaks down to 7 transactions per second, meaning that, with 2019’s volume of transactions, it may take up to an hour for a specific transaction to be processed (as of June, 2019). Providers using ledgers of differing/expanded sizes, such as Ripple, NEO, and Futurepia, can process over 1,000 transactions per second.
- In its early days, Bitcoin could be mined by a simple CPU, but those days are long gone – as are the days of even using a GPU to mine Bitcoin. Today, Bitcoin can only be mined by ASICs (Application-Specific Integrated Circuits), which are much faster than the aforementioned options, but more expensive to buy and operate, meaning that decreases the number of miners which defeats the purpose of decentralisation. To combat this, many altcoins, like Electroneum, BitTube, and Ethereum, have sought to increase the overall decentralised nature of their coin (or, if you prefer, democratize) by limiting or banning the usage of ACISs.
With more than 4,000 different altcoins currently available, there seems to be a cryptocurrency for whatever you’re seeking, be it speed, privacy, security, etc. So, while it may currently be Bitcoin and “everything else,” perhaps everything else deserves a second look.