If you know about bitcoin, then you should be know about altcoins as well. Altcoin is a broad term “coined” to classify cryptocurrencies other than bitcoin. Many bitcoin enthusiasts find altcoins to be a cheap copy of bitcoin. According to them, altcoins do not make the cut and they are a waste of time and resources.
As bitcoin technology is open source, its source code is out there and anyone and everyone can use it to develop their own version of cryptocurrency. It is a crowded market we agree, and some of these altcoins don’t make any sense. However, we ought to remember that altcoins have been there for a long time now and they got sidelined only after the bitcoin boom.
Most of these altcoins are created with a particular niche in mind, and some of them do fairly well while others fail miserably. Again, not all altcoins share the bitcoin source code. Some of them are standalone cryptocurrencies, which may or may not be completely open source and the chances of one of these altcoins taking on bitcoin in the near future is quite high.
Take an example of Ripple. It falls under the altcoin category (again, debatable), but good luck finding similarities between Ripple and bitcoin. Ripplec{oin} has been around since 2004 and it has a whole payment protocol built around it. Ripple(coin) is not even competing with bitcoin. Ripple is a proprietary trust based payment system that allows transactions with existing currencies. {Just to avoid confusion – Ripple(coin) – XRP is used for transactions in Ripple gateway}
Altcoins have their own way of balancing the cryptocurrency ecosystem. Even though most of these altcoins fade away even before they can leave a mark, they still contribute to at least a small increment in cryptocurrency technology. Also, many altcoins are easy to mine and they introduce more and more users to cryptocurrencies. These rookies who started with altcoins will eventually graduate to bitcoin, ultimately strengthening the bitcoin community.