Author: Alex

Bitcoin is not alone. Since its creation, thousands of cryptocurrencies have appeared with very different promises: smart contracts, faster payments, dollar-pegged stablecoins or memes with a market cap. All of them are called altcoins, and understanding what they are — and especially what they are not — is the first step to avoiding projects you do not understand.

What is an altcoin

An altcoin is any cryptocurrency that is not Bitcoin. The name comes from “alternative coin”. The first one appeared in 2011 (Namecoin), and tens of thousands have been launched since — although the vast majority have no real use or liquidity.

The label matters less than the difference underneath: Bitcoin was created as decentralized digital money and has not changed its purpose. Altcoins, in contrast, usually launch with their own thesis: an application platform, a payment system, a stable asset or simply speculation. Each one is an experiment with its own team, its own network and its own risk.

Types of altcoins

• Smart contract platforms: the most relevant category after Bitcoin. Ethereum is the classic example; Solana and other networks compete to be faster or cheaper. They are not just coins: they are platforms where decentralized applications run.
• Stablecoins: cryptocurrencies designed to always be worth the same (usually 1 dollar). USDT and USDC are the most used. They do not seek to rise in value, but to serve as a bridge: moving money into crypto without Bitcoin’s volatility.
• Memecoins: born from memes or internet culture, with no differentiating technology. They can rise a lot in a short time and fall just as fast. Pure speculation.
• Utility and governance tokens: they give access to a service within their ecosystem or voting rights over its development. Their value depends on the project having real use.

What they are for

Altcoins expand what can be done with blockchain. With Ethereum and similar networks you can create automatic loans, markets, digital identity or stablecoins without a bank. Stablecoins let you move value between exchanges in seconds without relying on traditional banking. And memecoins, let us be honest, exist mostly for speculation.

That variety is the argument in favor: not all altcoins are “Bitcoin with another name” — some solve problems Bitcoin does not address. The argument against is equally valid: most solve nothing and exist only to capture money from retail investors.

Main risks

• Extreme volatility: an altcoin can rise 10x in a month and lose 90% in another. That is normal, not exceptional.
• Projects that disappear: without real revenue, many projects are abandoned or turn out to be scams (rug pulls). The team can vanish with the liquidity.
• Low liquidity: in small projects, selling large amounts can be impossible without crashing the price.
• Regulation: most altcoins have no clear legal status; a regulatory change can remove them from exchanges.
• Technical complexity: each network has its own rules, wallets and risks (buggy contracts, hacked bridges). More attack surface than Bitcoin.

How to evaluate an altcoin before investing

• Does it have real use? Is anyone using it for something other than buying and selling it?
• Who is behind it? A public team with a track record, or anonymous founders with big promises?
• How long has it existed? Established projects survive cycles; new ones do not.
• Where is it listed? Being on major exchanges is a minimum filter, not a guarantee.
• How much can you afford to lose? If the answer is not “everything I put in”, you are taking more risk than you think.

FAQ

Are all cryptocurrencies that are not Bitcoin altcoins?

Yes, by definition. That includes Ethereum, stablecoins and memecoins. It is a broad label grouping very different projects.

Can an altcoin overtake Bitcoin?

In price, some have done so at certain moments. In relevance and network security, none come close: Bitcoin has over a decade as the largest and most resilient network.

Are stablecoins an investment?

Not in the traditional sense: their price does not rise. They are for stability and transfers, not appreciation.

What is a rug pull?

When a project’s creators withdraw all the liquidity and disappear with investors’ money. A common scam in small, unaudited projects.

Is it better to invest only in Bitcoin?

For most people, yes: less risk, fewer decisions, less attack surface. Altcoins are higher-risk bets that only make sense with money you can lose and after understanding each project.

Want to understand the difference with the original cryptocurrency? Read what Bitcoin is and how it works from scratch, or compare Bitcoin vs Ethereum to see two different blockchain philosophies.

A note on stablecoins

They aim to track a reference value but can lose their peg. Reserve, issuer, liquidity and contract risks remain; they are not equivalent to an insured bank deposit.

Further reading

• Bitcoin.org: how Bitcoin works
• Ethereum.org: documentation and concepts

Disclaimer: this content is for educational purposes only and does not constitute financial advice. Cryptocurrencies are volatile assets; only invest money you can afford to lose.

Bitcoin is the first digital money that works without banks, without borders and without anyone in charge. Since 2009 it has survived crashes, bans and thousands of imitators, and it is still the largest cryptocurrency in the world. Understanding what it actually is — and what it is not — is the first step before buying, investing or dismissing it.

What is Bitcoin

Bitcoin is a digital currency that exists only on a public network called the blockchain. There is no company behind it, no server you can shut down and no CEO to call. The rules are enforced by software that runs on thousands of computers around the world, owned by ordinary people.

Anyone can join the network, send or receive bitcoins and verify that transactions are real. No bank account is needed, and no one can freeze your money or block your address. That is the whole point: money that you control directly, without intermediaries.

How the blockchain works

The blockchain is a public ledger: a list of blocks, each containing transactions, linked to the previous one with cryptography. Every computer on the network keeps a copy, so there is no single point of failure.

When you send bitcoin, the transaction is broadcast to the network. Miners group pending transactions into a block and compete to add it to the chain. Whoever solves the cryptographic puzzle first gets newly created bitcoins as a reward. This system is called proof of work, and it is what makes the network secure: rewriting history would require more computing power than the rest of the network combined.

Who created Bitcoin

Bitcoin was launched in 2009 by a person or group using the pseudonym Satoshi Nakamoto. The identity has never been confirmed. Satoshi published the whitepaper in 2008, released the first software and disappeared around 2011, leaving the network running without a leader. That absence is by design: no founder, no company, no single point of control.

How new bitcoins are created

New bitcoins are created as a reward for miners, but the supply is capped at 21 million. Roughly every four years the reward is cut in half in an event called the halving. Around 19.9 million bitcoins already exist, and the last one is expected to be mined around the year 2140.

This fixed supply is what makes Bitcoin scarce. No government can print more of it, and no developer can change the cap without the agreement of the entire network.

Why Bitcoin has value

Bitcoin’s value comes from the same thing that gives value to gold: scarcity, durability and trust. There will only ever be 21 million bitcoins, they cannot be counterfeited, and the network has never been hacked in its history. On top of that, it is global, divisible and transferable in minutes.

That does not mean it is a safe investment. Bitcoin is extremely volatile: it can rise a lot, but it has also fallen more than 50% in a matter of months. Only invest money you can afford to lose.

Common myths

• Bitcoin is anonymous: no. It is pseudonymous. Addresses are not linked to your name, but every transaction is public forever.
• Bitcoin is a bubble that will burst: it has been declared dead hundreds of times and keeps operating. That does not make it a good investment, just a resilient network.
• Bitcoin is bad for the environment: the network uses a lot of electricity, but most miners use renewable energy, and the debate is more nuanced than the headlines.
• Bitcoin is the same as blockchain: no. Bitcoin is a cryptocurrency that uses a blockchain. The technology is used by many other projects for very different purposes.

FAQ

Is Bitcoin legal?

In most countries yes, as an asset or means of payment. Regulation varies: some countries accept it as legal tender, others only allow it as an investment. In Spain it is recognized as an asset and must be declared.

How many bitcoins are there?

Around 19.9 million, out of an absolute maximum of 21 million. The last bitcoin will be mined around the year 2140.

Can I mine Bitcoin from home?

Not profitably today. Competition is global and requires specialized hardware (ASICs). Mining with a regular computer consumes more electricity than it recovers.

Where can I keep my bitcoins?

In a wallet: a software or hardware tool that stores your private keys. Read our guide to crypto wallets to choose the right one.

Can Bitcoin be copied?

The code can be copied, but the network cannot: its value comes from the largest and most secure network in the industry, which no clone has.

Want to keep learning? Read what Ethereum is and how it differs from Bitcoin, or how to buy your first bitcoins step by step.

Further reading

• Bitcoin.org: how Bitcoin works
• Ethereum.org: documentation and concepts

Disclaimer: this content is for educational purposes only and does not constitute financial advice. Cryptocurrencies are volatile assets; only invest money you can afford to lose.

Buying Bitcoin for the first time feels like a maze: exchanges, verification, wallets, keys, fees. The good news is that the process is simpler than it looks, and you can do it in an afternoon. This guide walks you through every step, from choosing the platform to storing your bitcoin safely.

Step 1: Choose an exchange

An exchange is a platform where you buy and sell cryptocurrencies. For a first purchase, look for one that is regulated in your country, has been operating for years and offers a simple interface. The most popular global options include Coinbase, Kraken and Binance, among others.

What matters more than the brand: regulation (is it supervised by a financial authority?), reputation (how long has it been operating and what is its track record?) and fees (what does it charge for buying, selling and withdrawing?). Avoid obscure platforms that promise zero fees: they often earn it back somewhere worse.

Step 2: Create an account and verify your identity

Exchanges are required by law to identify their customers (KYC). You will need your ID document, a phone number and sometimes a proof of address. Verification usually takes minutes, though it can take longer in some cases.

This step annoys many people, but it is normal and non-negotiable: no legitimate exchange will let you buy without it. It is also your first protection — a regulated platform knows who you are and can help you if something goes wrong.

Step 3: Buy bitcoin

Once verified, you can deposit money with a bank transfer or card and buy bitcoin. The process is usually as simple as entering the amount and confirming. Two tips for beginners:

• Start small: buy an amount you are comfortable with. Bitcoin is volatile and you are learning.
• Use recurring purchases if you want to dollar-cost average: buying the same amount every week smooths out the price swings and removes the stress of timing the market.

Step 4: Move your bitcoin to your own wallet

This is the step most guides skip, and it is the most important one. Bitcoin kept on an exchange is not really yours in a practical sense: the platform holds the keys. If the exchange is hacked or freezes withdrawals, your bitcoin can be stuck or lost.

A wallet is software or hardware that stores your private keys — the password that proves the bitcoin is yours. For amounts you plan to hold, a hardware wallet (a physical device like a USB stick) is the safest option. For small amounts, a reputable software wallet is fine.

The rule of thumb: not your keys, not your coins. If you do not control the private keys, you do not really control the bitcoin.

Step 5: Keep your recovery phrase safe

When you create a wallet, it gives you a recovery phrase: 12 or 24 words that can restore your wallet if you lose your device. Write it down on paper and store it somewhere safe. Never photograph it, never save it in a notes app, and never share it with anyone — anyone with that phrase can take your bitcoin.

There is no customer support for a lost phrase. It is the one thing you cannot afford to lose.

Common mistakes to avoid

• Buying more than you can afford to lose: bitcoin can drop 50% in months. Only invest money you do not need.
• Leaving everything on the exchange: convenient, but it is someone else’s control.
• Saving the recovery phrase digitally: screenshots and cloud notes are how people lose everything.
• Following “guaranteed profit” advice on social media: nobody can guarantee profits. If it sounds too good, it is a scam.

FAQ

How much do I need to buy Bitcoin?

You can buy fractions: most platforms let you start with as little as 10 or 20 euros. You do not need a full bitcoin.

Is it safe to buy Bitcoin?

Buying on a regulated exchange is safe in the sense that your funds are handled by a supervised platform. The risk is the asset itself: it is volatile, so only invest what you can afford to lose.

Do I have to pay taxes?

In most countries, yes. In Spain, for example, gains are taxed and must be declared. Check the rules in your country before selling.

What is the difference between an exchange and a wallet?

An exchange is a marketplace where you buy and sell; a wallet is where you store your bitcoin. You need both, but only the wallet gives you control.

Can I buy Bitcoin with PayPal or card?

Many platforms accept cards and some accept PayPal, usually with higher fees. Bank transfer is generally the cheapest option.

Ready to go deeper? Learn what Bitcoin actually is and why it has value, or how to choose a wallet that fits your needs.

Further reading

• Bitcoin.org: how Bitcoin works
• Ethereum.org: documentation and concepts

Disclaimer: this content is for educational purposes only and does not constitute financial advice. Cryptocurrencies are volatile assets; only invest money you can afford to lose.