Altcoin

‘Altcoin’ comes from ‘alternative coin’: it means every crypto-asset other than bitcoin – from projects with their own blockchain to stablecoinsGlossaryStablecoinA crypto-asset whose value is meant to be pegged to a currency such as the US dollar or the euro. Unlike bitcoin, a stablecoin has an issuer – its value depends on the issuer keeping its reserves and remaining solvent.In the glossary →× and short-lived joke tokens. Some split off from Bitcoin through a hard forkGlossaryHard forkA change to the consensus rules that allows previously invalid blocks. Old nodes reject such blocks; if not everyone goes along, two permanently separate chains emerge – and with them a new, separate currency.In the glossary →×; most were launched from scratch.

Blockchain21 explains only Bitcoin. The reasons are in Bitcoin, not ‘crypto’.

Questions you can ask about any project

• Who got how much in advance? On the XRP Ledger, for example, all 100 billion XRP existed from the start; in 2012, 80 billion went to the company now called Ripple.^[1] Bitcoin had no pre-allocation: new BTC are created only as the reward for new blocks.^[2]
• Can anyone create or freeze tokens, or change the rules on their own?
• Where does the value come from: real use, or mainly marketing?

Beware of hype

New tokens are often marketed as ‘the next Bitcoin’. The EU financial supervisory authorities warn against ‘pump and dump’ and ‘rug pull’ schemes: a token is pushed up with advertising, then the initiators sell or disappear with the money.^[3] A high market capitalisationGlossaryMarket capitalisation (market cap)Circulating supply multiplied by the current price. The figure shows the order of magnitude – not how much money has actually been invested or would come out if everything were sold.On the learning path: Stage 2 · Step 2 – Halving & 21 million →In the glossary →× doesn’t protect against this. So check for yourself before you buy anything (DYORGlossaryDYOR (Do Your Own Research)Short for ‘Do Your Own Research’: check information yourself instead of blindly following tips. Meant seriously, it’s good advice – tacked onto promotions for dubious projects, it’s often just a phrase that shifts responsibility.On the learning path: Stage 6 · Step 2 – Spotting scams →In the glossary →×).