An altcoin is any coin besides bitcoin. The "alt" in altcoin stands for alternative.
Because Bitcoin is often seen as the original crypto of all coins, all other coins are seen as alternative. Many crypto coins that exist today also aim to be an improvement on Bitcoin. Litecoin, for example, was created to provide a faster alternative to Bitcoin. Monero aims to provide privacy better than Bitcoin.
Many altcoins are created through a fork (LINK). Litecoin, for example, is a copy of Bitcoin with a few minor modifications.
The main difference between Bitcoin and many other crypto-currencies is the consensus mechanism used. Bitcoin uses Proof-of-Work (PoW) while many altcoins use Proof-of-Stake (PoS). PoS consumes less energy and is more scalable for that reason.
Several tens of thousands of altcoins exist. These altcoins have different purposes. Below are the most common types of altcoins.
Stablecoins are there to counteract violent price fluctuations that some coins suffer from. The idea of a stablecoin is that the value is represented by fiat currency, or by a commodity such as gold.
Utility tokens are used to pay for a network's features. An example is the Basic Attention Token (BAT). The BAT is used on the Brave browser. Users receive BAT to view ads and advertisers use the BAT to pay.
Of the existing altcoins, by no means all are useful. A memecoin is a coin that was actually conceived as a joke. This coin has no advantages over other coins. In addition, its purpose is not clear and there is often no good white paper available. From the name of a coin you can often tell if it is a memecoin. If there is a dog breed in the name, chances are you are dealing with a memecoin.
