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What is an altcoin?

What is an altcoin?

In this video, I attempt to answer the question of what an altcoin is, what an alt-chain is, and how that differs from Bitcoin. Do altcoins matter? and What altcoins ...

Transcription

What's up, party people? Chris DeRose here, community director of Counter Party Foundation. And today we're answering the question: What is an altcoin? So for people who are kind of new to bitcoin, they probably haven't heard of this term, altcoin. And altcoins are alternative coins to bitcoin. So in the same way that we have many web browsers or maybe we have many word processors, there are many digital currencies. Now, it gets a little bit more complicated from here. In the early days, altcoins were something that I think people had a lot of faith in.

They thought maybe bitcoin wasn't gonna stick around for a long time. And so what they built was an entire replacement for bitcoin, something that required no bitcoin whatsoever to work. We have since come to perhaps refine our views a bit. Certainly, I have. Not everybody feels this way, but we've decoupled the notion of a coin from a chain. The chain itself is the consensus mechanism.

I talk about it a bit on this channel, but the chain itself is probably the most important part of these digital currencies. The altcoins are typically a separate chain from bitcoin, or always a separate chain from bitcoin, and there are a separate coinage from bitcoins. So some examples are dogecoin, litecoin, ripple, and really on and on and on. Now, the reason we called these altcoins is...

It's kind of important to know because they're not bitcoin. But it kind of, for me, it really shows how important bitcoin is, that there is this dichotomy between actual digital currency and not actual digital currency. And maybe that's a bit of artistic license there, but that's how I see it. Now, I want to bring up the sort of schism between the past and now because I see that today we have a lot of needs for alternate coinage besides bitcoin. And I talk a lot about this on my channel. It's very useful to decouple tokens of value from bitcoin or from any currency.

Now, what I foresee happening, and why this is relevant to Counterparty, is that there is a way or there is many ways to have alternate coinage on the chain that is the bitcoin chain. These are in the Counter Party parlance assets. So you can define these coins. Now, we typically call those metacoins at some level, or assets, really. And it's a little bit nebulous. A lot of this stuff is still shaking out, and we're kind of like filling out the sort of blanks here and understanding how this thing is working.

But it's important to note that thing and the altcoin terms that the size of the bitcoin market, the size of the bitcoin chain, and the security and strength of bitcoin is vastly outnumbering, not only any one of the altcoins, but perhaps all of them put together. So I think in the recent years, the altcoins have become less and less important, as they have been failing one by one and really not getting any attraction. And this kind of gets into the way that Blockchains works, how... It's certainly my belief that, because Blockchains work, there's an incentive to join the largest chain, and that's why we see bitcoin as being the primary coin and the altcoins being the secondary coins.

But that might be a trend that dies. I don't really know. I think there is some room for altcoin, we'll see what happens. But the way things are going, it's not something that's probably very important to focus on, outside of bitcoin. So that's it. That's what an altcoin is.

That's the rough overview. And if you have any questions about altcoins, or any one in particular, feel free to ask me. You can leave a comment here in this video, or you can tweet me on Twitter. My email address is Chris@ChrisDeRose.com, and my twitter handle is @DeRoseTech. So subscribe to the channel if you like this answer and you want to see some more.