Altcoin originally meant “Bitcoin alternative” since every blockchain-based currency was viewed as a form of Bitcoin (BTC) imitation. Previously, cryptocurrencies such as Litecoin (LTC), Ripple (XRP), and Peercoin (PPC) were primarily used for transactions. Altcoin is a catchall name for all cryptocurrencies besides Bitcoin.
This has altered since 2011 with the rise of over 20,000 cryptocurrencies, each associated with a distinct form of crypto project and token. In addition, the versatility of coins has expanded to include public chains, decentralised finance (DeFi), layer 2, decentralised autonomous organisations (DAOs), stablecoins, and other applications.
If “altcoin” refers to non-Bitcoin cryptocurrencies having the same properties as Bitcoin, this definition no longer applies to all 20,000 cryptocurrencies.
The current definition of an altcoin is far more specific, usually referring to an alternative coin inside a given track. Altcoins are frequently more advanced in technological features or ecosystem uses, but none have come close to matching Bitcoin in consensus, prevalence, or market valuation.
Ethereum’s shifting altcoin status
Even Ethereum was first viewed as another Bitcoin clone when it debuted in 2015. At that time, Ethereum would have perfectly met the old definition of an alternative cryptocurrency.
Ethereum’s standing as the premier altcoin resulted from advancements in the broader crypto ecosystem and its operating capabilities. Ethereum surpassed Bitcoin technologically to become the first public chain to support smart contracts, thus accelerating the development of DeFi.
The decentralised application and community parts of Ether’s growth have resulted in a more dynamic community. The 2017 initial coin offering (ICO) boom, the DeFi Summer of 2020, and the debut of multiple public chains using Ethereum Virtual Machine have accelerated this expansion. By showing its strength in various applications, Ether has become a viable alternative for establishing a legitimate consensus and garnering community support.
In 2015, it made sense to label Ethereum an altcoin, but its vast applications and growth since then make this description a bit limiting. And we’ve yet even to consider the Merge.
The game changer
The Ethereum Merge, a landmark transfer of Ethereum’s consensus mechanism from proof-of-work to proof-of-stake, was the first in a six-part process. The following measures allow Ethereum to “handle 100,000 transactions per second.”
.@VitalikButerin claims that #Ethereum will be able to to process “100,000 transactions per second”, following the completion of 5 key phases:
• The Merge
• The Surge
• The Verge
• The Purge
• The SplurgeA quick breakdown of what each stage means for $ETH. 👇 pic.twitter.com/FnaWww8mHZ
— Miles Deutscher (@milesdeutscher) July 22, 2022
Investors did not anticipate a rapid price increase, although the Merge had several positive effects, such as a sharp decrease in energy use and enhanced security. Instead, it only set the foundation for other infrastructure to alleviate its problems in the coming years.
We should also expect new revolutionary currencies to emerge as competitors to Ethereum and Bitcoin. Though ETH investors have set their eyes on a potential flippening, in which the ETH market value surpasses that of BTC, to destroy the altcoin classification definitively, other blockchain participants are locked out. Ultimately, cryptocurrency is not intended to be a monopoly.
The dominance of major participants in the blockchain space, such as Bitcoin and Ethereum, should not discourage the entrepreneurial spirit of other blockchain developers or alternative networks. It’s not as simple as the Bitcoin camp vs. the Ether camp. Networks like Polygon already show that community-building and diversified blockchain applications are not exclusive to the crypto industry’s elite.
If Bitcoin’s status as the first cryptocurrency means that all other coins are eternally regarded as altcoins, then neither Merge nor any further Ethereum development can change this. But if the name is merely a matter of semantics, altcoins can display that the name is irrelevant. Removing the stigma associated with altcoins will benefit Ether and the broader community of blockchain and cryptocurrency innovators.
