Altcoin buying guides

An A-Z list of our guides on how to buy 500+ different cryptos.

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While Bitcoin is slowly gaining a foothold in mainstream finance, an entire industry of cryptocurrency beyond Bitcoin is waiting for you to explore. Here’s what you need to know.

What is an altcoin?

The term “altcoin” describes any cryptocurrency other than Bitcoin. Over 1 million altcoin transactions happen every day, and some of the biggest household names, such as Nike and Starbucks, use altcoin-powered blockchains.

That said, not all altcoins are created equal. While some altcoins power billion-dollar brands’ Web3 ventures, many turn out to be shady cash grabs from anonymous developers.

There are over 100 new altcoins released daily, with most never amounting to anything. So how can you tell the good from the bad and ugly?

What are the different types of altcoins?

Before we break down the types of altcoins, let’s cover the difference between a coin and a token. You might hear the 2 terms thrown around interchangeably, but there’s an important distinction between them.

A coin is any cryptocurrency native to a blockchain. In contrast, a token refers to a cryptocurrency that’s not the underlying blockchain protocol’s native coin. For example, Ethereum (ETH) is a coin, whereas Uniswap (UNI) or Shiba Inu (SHIB) are tokens.

That said, the term “altcoin” doesn’t distinguish between coins or tokens. As mentioned before, the term altcoin covers all cryptocurrencies except Bitcoin.

Payment tokens

Payment tokens are cryptocurrencies whose primary use is a means of payment. These tokens are usually layer one chains’ native coins like Bitcoin. Some other examples include Litecoin, zCash and Dogecoin.

Meme coins

Meme coins are cryptocurrencies whose focus is memes and humourous content, often including a playful name and logo and active communities on Twitter and Discord. Many new meme coins could more accurately be described as meme tokens (besides Dogecoin, which has its own chain).

The key characteristic of meme coins is the engaged communities. It’s these communities which can cause prices to surge quickly. Unlike utility coins like ETH, or governance tokens like ARB, meme coins do not provide users with any value outside of the coin itself.

Utility tokens

Utility tokens play a key part in a cryptocurrency use case, giving them inherent demand and value. Ethereum’s ETH is the most popular utility token. Users need ETH to pay gas fees on the network, so as more people use the network, the coin will grow in demand.

Gas fees are the transaction fees which you pay for making a transaction on a blockchain network.

Security tokens

A security token is a cryptocurrency representing a share in another asset. For example, a company could divide its ownership into shares and distribute them as cryptocurrency tokens.

Governance tokens

A governance token is a cryptocurrency that provides the holder with a say on the direction of a blockchain network or protocol. Since voting is generally done on-chain, governance tokens offer a more transparent alternative to traditional voting methods.

Mining coins

Mining coins are coins native to proof-of-work blockchain networks. Network participants can earn mining coins by recording and validating network transactions, also known as mining.

What is the future of altcoins?

Historically, meme coins have seen massive rallies. In the 2021 bull market, top meme coins like Dogecoin and Shiba Inu went from relatively unknown to top 10 cryptocurrencies by market cap. While we could see more meme coins heading to the top 10 cryptos in the future, meme coins are volatile, and many turn out to be scams.

That said, plenty of other coins provide users with real value and have long-proven track records. For example, applications built on top of the Ethereum chain enable everything from tokenising real-world assets to managing identities on the blockchain.

However, one of the things holding Ethereum down is its long–standing issues with high transaction fees. Still, layer two projects like Arbitrum, Polygon and Optimism are solving the scalability issue, enabling users to benefit from Ethereum’s security while executing transactions at a fraction of the cost.

Altcoins vs Bitcoin: which is better?

The table below compares some of the key features of Bitcoin and altcoins.

BitcoinAltcoins
Use casesPeer-to-peer transaction systemLots of different use cases
Risk levelLowMedium – high
Is price utility-driven?Yes. Bitcoin already works as it should.Most altcoins remain speculative. Even many Ethereum use cases are still theoretical and are yet to come to fruition.

Is it a good idea to invest in altcoins?

Altcoinshave provided life-changing returns in the past . However, altcoins come with risk; while some altcoins can be profitable, most never get off the ground.

When deciding what altcoins to buy, it is crucial to first due your due diligence. Ensure the cryptocurrency has a solid use case, real demand and relatively high liquidity.

Pros and cons of altcoins

Pros

  • Higher potential for growth than Bitcoin.
  • Wide range of use cases.
  • Unique advantages to users.
  • Companies like Nike, Starbucks, Tesla and Microsoft have adopted altcoin-powered networks to pursue their blockchain interests.

Cons

  • Higher risk than Bitcoin.
  • The use cases can be challenging to implement.
  • Complicated user experience is preventing mainstream adoption.
  • Thin liquidity.

Bottom line

Altcoins can get a bad reputation, but they’re innovating and revolutionising the world as we know it. They’re making it possible to reward, secure and verify all participants on the internet.

Finding the “best” altcoins can be a painstaking task, not to mention the risk associated with investing in the wrong ones. For the average user, the best option is to look at well-known, high market cap coins with a track record.

The A-Z list of altcoins

Read more about some of the most popular altcoins in one of our comprehensive guides below.

Trade altcoins on these exchanges

Table: shows partner brands and other brands, sorted by popularity

Compare exchanges to find one with the right mix of altcoins for you.

1 - 5 of 6
Name Product Deposit methods Fiat currencies Cryptocurrencies Offer Disclaimer Link
eToro UK Cryptoasset Investing
Bank transfer, Debit card, eToro Money

21

76

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Capital at risk

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Finder Award
Kraken Cryptocurrency Exchange
Bank transfer, Credit card, Cryptocurrency, Debit card, Apple Pay, Google Pay, SWIFT

7

238

Go to site

Capital at risk

View details
Uphold - Digital Asset Platform
Bank transfer (ACH), Debit card, Apple Pay, Google Pay

27

214

Go to site

Capital at risk

View details
CoinJar Cryptocurrency Exchange
Bank transfer, Credit card, Cryptocurrency, Debit card, SEPA, Faster Payments (FPS), Apple Pay, Google Pay

4

63

Go to site

Capital at risk

View details
Coinpass Cryptocurrency Exchange
Coinpass Cryptocurrency Exchange
Bank transfer, Cryptocurrency

2

13

Go to site

Capital at risk

View details
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Frequently asked questions

*Cryptocurrencies aren't regulated in the UK and there's no protection from the Financial Ombudsman or the Financial Services Compensation Scheme. Your capital is at risk. Capital gains tax on profits may apply.

Cryptocurrencies are speculative and investing in them involves significant risks - they're highly volatile, vulnerable to hacking and sensitive to secondary activity. The value of investments can fall as well as rise and you may get back less than you invested. Past performance is no guarantee of future results. This content shouldn't be interpreted as a recommendation to invest. Before you invest, you should get advice and decide whether the potential return outweighs the risks. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Written by

Elliott Lee

Elliott Lee is a freelance writer specialising in cryptocurrency and fintech. He's been involved in the crypto industry since early 2020, and his work has been published on a range of sites. His particular interests are DeFi and exploring how cryptocurrency can solve real-world issues. Elliott also loves to travel and learn about different cultures and languages, and he's always trying new sports and activities. See full profile

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2 Responses

    Default Gravatar
    LuizMay 14, 2018

    is there a site where one can see real-time comparative graphs of how the different coins are behaving?

      AvatarFinder
      joelmarceloMay 24, 2018Finder

      Hi Luiz,

      Thanks for leaving a question on finder.

      Unfortunately, we do not have real time graphs on finder yet and I would like to thank you for the feedback as this is something that may be a good addition to our website. However, I tried looking up “live cryptocurrency exchange rates” and came up with useful search results using an external search engine. Hope it helps.

      Cheers,
      Joel

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