What are alt coins?

You may have come here interested in learning more about Bitcoin, followed the beginners guide and been perplexed when you were instructed to create a Dogecoin wallet and claim some free Doge coin from a faucet.

When Bitcoin was first created it followed a set of rules which, over time, some people questioned. They wondered if it would be possible to create a better version of Bitcoin. Once mining (the process of verifying transactions and securing the network) became more specialised, requiring specific machines to be able to mine at a profit some were nostalgic for the time when anyone with a simple computer could use their CPU or GPU to secure the network effectivly.

People started creating a number of alternative versions (hence 'alt coin'), some with more coins in total, some with different algorithms that secured the network (an attempt to escape the centralising force created by the invention of ASICs), some which moved away from using a Proof of Work method altogether and instead trying to use a Proof of Stake.

Some people genuinly believed that the alternative coins they'd created could out do the network effect of Bitcoin, but, to date, this has proven to be a pipe dream.

At some point so many alt coins were being created that there were several a week appearing. Inevitably, hidden among those launched with good, if naieve intention, there were a number which were only ever designed to enrich the creator at the expense of anyone who took a risk and spent any money or computing power on the new coins. This process is continuing to this day, yet Bitcoin remains king of the pile.

These alts also serve another useful function. By testing out technology in a way which would be impracticle, if not completely impossible, on the bitcoin network, we have a chance to see which features people truely value the most. It seems that decentralisation and anonymity are two of the most popular features, as evidenced by the ongoing attempts to create coins using algorythms for which no ASICs exist, to the success and ongoing popularity of coins which mask transactions through various methods, such as DASH (previously DarkCoin) and Shadow Cash.

Dogecoin, as mentioned at the top of this post, was launched as a joke, a way of poking fun at the vast numbers of coins in existence, and was never intended to remain an ongoing project. However, an incredible community formed around this digital currency which saw it featured on Nascar sponsorship, which also saw the community raise funds to support the Jamaican bobsleigh team reach the winter olympics (yes, cool runnings fans, it's true) and has seen a large amount of charitable fundraising. It's also, so I'm lead to believe, a community with far more active female participants than the more traditional male geek centered world of Bitcoin, though that's a subjective assesment and not based on the results of any surveys or hard information.

So, there it is in a nutshell, the fantastic chaotic and tumultuous world of the humble alt coin.