Bitcoin vs. Altcoins vs. Stablecoins: What’s the Difference?

Whether you are interested in cryptocurrencies or not, you have probably heard of Bitcoin, the most popular cryptocurrency in the world. Its value has skyrocketed in the last decade and many people consider it an extremely valuable asset today.

But what exactly is Bitcoin and how is it different from altcoins and stablecoins? Let’s discuss the key attributes of each, as well as how they are similar.

What is Bitcoin?

bitcoin stood on a pile of other coins

Bitcoin is the most valuable crypto currency in the world right now. Like all other cryptocurrencies, it is a decentralized digital currency and currently stands as the first known cryptocurrency in circulation. It was created in 2009 after the recession by Satoshi Nakamoto. However, many believe that it is a pseudonym used to hide the true identity of the founder.

We don’t have much information about the founder, but Satoshi was the author of the Bitcoin white paper and developed its original reference implementation.

In July 2010, shortly after the creation of Bitcoin, one BTC was worth between $0.0008 and $0.08. Less than a year later, it jumped from $1 to $26.90. It experienced ups and downs in the years that followed, peaking at over $1,000 in 2013, but then dipping back to just over $300 in early 2015. Although the price was rising, Bitcoin was still fairly unknown to most. during the first years of its existence until the cryptocurrency boom in 2017.

Related: Proof of what? Key Cryptographic Mechanisms Explained


Before the year 2020, you may have heard of cryptocurrencies, but it was not uncommon for you not to. The cryptocurrency industry was still unknown to most people, but that was about to change. People started investing in Bitcoin for various reasons: the decentralized nature of the currency, the growing market capitalization of the industry, and fears of macroeconomic instability.

This increased investment in Bitcoin drove its price to heights that no one could have foreseen. At the end of the year, a coin was worth twenty-seven thousand dollars. Since then, Bitcoin has certainly had its fair share of ups and downs, but it remains the most popular and valuable cryptocurrency in the world.

So now we know the most popular cryptocurrency out there, but what about the rest?

What are alternative currencies?

stack of different altcoins

People use the term “altcoin” to refer to any cryptocurrency other than Bitcoin. This is mainly because Bitcoin is incredibly well known, while many other cryptocurrencies are not. Furthermore, Bitcoin was the first coin of its kind and is still the default crypto known to those who don’t even have an interest in the crypto industry. In addition to this, other cryptocurrencies were only developed after the success of Bitcoin became apparent, thus they are seen as a sequel to the original.

In short, it is a portmanteau of “alternative” and “currency”, since people see altcoins as alternatives to Bitcoin. You might consider the term “altcoin” a generalization, since it is used to categorize thousands upon thousands of cryptocurrencies. But most altcoins use the Bitcoin blockchain ecosystem as a template, so Bitcoin remains the first decentralized digital currency with this revolutionary blockchain structure.

Related: Best Bitcoin and Cryptocurrency Apps for iPhone

Currently, the most valuable altcoin in the world is Ethereum or ETH. Developed in 2015, the creation of Ethereum stemmed from its creator’s disdain for centralized systems. Vitalik Buterin decided that decentralization was the future when the developers of World of Warcraft nerfed his favorite character in the game. He developed Ethereum a few years later, and the currency experienced some ups and downs between then and 2020.

Then, just like Bitcoin, Ethereum saw an exponential rise in value in 2020 and now stands as the most expensive altcoin in the world. Various other altcoins have seen success in recent years, each developing their own blockchain ecosystem with different objectives, goals, and characteristics. But these levels of success are not the standard for all altcoins.

Many people develop their own altcoins, only to realize that they are not going to lose value anytime soon. There are also many scam coins or shit coins out there. People often develop these fake coins to attract investors and then jump ship once the coin has reached a decent price. Squidcoin stands as an example of this type of rug mining scheme.

Related: Crypto Scams You Should Know Before Buying Bitcoin

However, there are still plenty of altcoins out there that perform incredibly well. Polkadot, Ripple, Tezos etc are some of the viable coins that would be a good investment option, but it is always important to do your research first!

Now, let’s discuss the last of this trio of terms: stablecoins.

What are stable coins?

crypto coins next to a bag of money

As the name suggests, stablecoins are cryptocurrencies designed to have considerably more stable value than traditional crypto currencies. This is because they are backed by something called a reserve asset. These are foreign assets controlled by monetary authorities, such as traditional currencies like the US dollar.

Related: Top Stablecoin Alternatives to Tether (USDT)

Unlike a typical crypto coin, you typically won’t see huge price spikes or drops with stablecoins. If you are banking on investing in cryptocurrencies and seeing them soar, stablecoins are probably not the right one for you. The goal of stablecoins is to allow users to own a decentralized currency and remain anonymous without worrying about fluctuations in value.

Some stablecoins, like Tether, are pegged to the value of the US dollar. Therefore, one Tether (USDT) is equal to one US dollar. This is known as a fiat-collateralized stablecoin, as the US dollar is used as collateral for the issuance of Tether.

coin market cap tie price screenshot

As can be seen in the above graph of CoinMarketCap, Tether price fluctuations are minor compared to what you would see in typical cryptocurrencies. Even the prominent peak you see towards the right side of the chart amounts to a rise of only $0.0118. Other examples of fiat collateralized stablecoins are DAI and TerraUSD.

So if you want to spend crypto and benefit from its secure and decentralized nature, stablecoins could be a great option for you.

Do your research before you buy Bitcoins and Altcoins

Before you spend money on cryptocurrencies, it is essential to know which type of coin fulfills which function so that you can align your needs with those of a particular coin. Once you know which coins serve which purpose, you will be better able to decide which specific coin is right for you. Do not worry; you have a lot to choose from!

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