PreciousRuby Okeke · Follow
7 min read · Mar 30, 2024
The crypto ecosystem is one of the busiest ecosystems in the world, with hundreds of crypto projects launched daily.
According to Statista, over 20,000 cryptocurrencies have been launched since 2009 till now. Over half of these cryptocurrencies have either declined to zero or become inactive.
Today, there are just a little less than 9,000 cryptocurrencies in operation.
As a crypto investor, it is important to know that not all cryptocurrencies are created the same.
Some cryptocurrencies are created to have real-world value, while some are designed for fun, and some others are created as a means to make money quickly.
Below, I will be explaining different types of cryptocurrencies, why they exist and how to spot each one.
These types of cryptocurrencies are also known as Alternative Coins.
Altcoins are cryptocurrencies with value but are not Bitcoin or Ethereum. The term “altcoin” was coined by Bitcoin maximalists to describe any other coin order than Bitcoin that holds value.
In other words, any cryptocurrency that isn’t Bitcoin and Ethereum are classified as Altcoins.
According to Coingape, the very first altcoin created was “Namecoin ‘’.
Namecoin was hard forked from the Bitcoin blockchain.
Note: A hard fork is when a new set of codes is implemented on a blockchain (like Bitcoin), and the new blockchain created out of the former blockchain is incompatible to run alongside the former. So, the new splits from the old and operates independently.
The Namecoin cryptocurrency was created in 2011 and was initially designed to input data into the Bitcoin blockchain. It shares similarities with Bitcoin; however, this altcoin has become less popular among investors.
It is essential to know that various altcoins have different purposes, technologies, and use cases. Most popular altcoins are built on their blockchains, like ETH and ADA.
Developers of these coins design them to serve different functions. For example, SOL, a popular altcoin, is intended to support the making of smart contracts and decentralised applications.
While LINK is designed for specialised applications within the healthcare industry.
Examples
Thousands of altcoins exist today, but only about five hundred hold real value and can be traded easily on various crypto exchanges.
Altcoins fall into different categories, like stablecoin, governance tokens, security tokens, gaming tokens, and sometimes meme coins.
Coins that fall into these categories function differently and serve various purposes.
Some popular altcoins (apart from those mentioned above) are:
Litecoin (LTC), Bitcoin Cash (BCH), Polygon (MATIC), Polkadot (DOT), Tether (USDT), Ripple (XRP), Tron (TRX), etc.
Purpose of existence
As stated, various altcoins are created to serve different purposes in the crypto ecosystem, so most coins operate differently.
- Altcoins were created to address the inefficiencies of BTC & ETH.
- They aim to solve existing world problems through blockchain technology.
- They act as a store of value and can be swapped for real-world money.
- They help to facilitate decentralised P2P payments.
- Some altcoins like ADA & DOT were designed to improve transaction speed on blockchains and reduce energy consumption.
- They make trading valuable items in different ecosystems, like the gaming ecosystem, flexible and possible.
Ever heard of this saying,” All meme coins are altcoins, but not all altcoins are meme coins.” This is true because although most crypto enthusiasts classify meme coins as altcoins, they have several striking differences.
Both differ based on the purpose behind the project, the technology used, their real-world use cases, and their price volatility.
In the crypto ecosystem, meme coins are cryptocurrencies designed for fun, humour, and entertainment. They derive their name and characteristics from popular internet memes, and they often have no specific use case behind them.
Most meme coins in the crypto space have zero inherent value but have become quite popular because they capitalise on hype and viral internet memes.
A good example is the Pepe coin (PEPE), created from a viral meme called “Pepe the Frog.”
Dogecoin (DOGE) was the first ever meme coin to be created, and today, it is considered the Lord of meme coins.
Meme coins have become an integral part of the crypto ecosystem, and some crypto investors have made a fortune by investing in them.
Most meme coins are tokens created on blockchains like Bitcoin, Ethereum, or Solana.
One fantastic thing about meme coins is the communities that back them. Popular meme coins like Dogecoin, Floki & Shiba Inu have solid and loyal communities backing them. And most times, these communities run the project.
Community engagement is a vital characteristic of coins within this category. Without their communities, they cannot survive or go viral.
Examples
An interesting fact about meme coins is that some popular meme coins like Dogecoin started as memes; however, they have grown into altcoins with valuable use cases.
The combined market cap of all Memecoins is worth hundreds of billions of dollars, and some of the popular meme coins you should know are:
Bone ShibaSwap (BONE), Dogwifhat (WIF), Bonk (BONK), Memecoin (MEME).
The Change
Meme coins hold limited real-world use cases and are used purely for entertainment or community belonging and engagement.
However, they can be used for speculative trading.
As said earlier, meme coins like Dogecoin have evolved to facilitate peer-to-peer payments among users.
Shiba Inu, on the other hand, has also evolved and has an ecosystem of layer two blockchains alongside its decentralised exchange, ShibaSwap, Shibarium, and its SHIB metaverse.
This is another class of cryptocurrencies that most people don’t know of, but they exist and somehow add a particular touch to the crypto space.
sh*tcoins are popular within the DeFi Degen space.
Note: Defi degen is also known as DeFi degenerate. It is classified as an unregulated & unsupervised part of decentralised finance that is popular for creating crypto projects designed for pump-and-dump scams.
sh*tcoin are cryptocurrencies that have little to no value or real-world use case. They lack the growth potential and also lack an excellent project foundation.
Other characteristics of sh*tcoin:
They lack a credible development team.
They are very volatile.
The planning of the project is rushed and poor.
They have low liquidity or market cap.
They are highly prone to pump and dump schemes or rug pulls.
Their value, when listed on exchanges, reads 0.00000000085, etc.
Developers, creators and investors of sh*tcoin projects have a single goal which is to make huge profits in a short amount of time upon the launch of the project and by manipulating the price of the coin launched.
After the profits are made, the creators of this project immediately abandon the coin, thereby leaving other investors with worthless tokens which are challenging to sell or exchange.
Examples
Although sh*tcoins are highly speculative and are considered very volatile & risky investments, most crypto investors tend to trade them and hold some sh*tcoins in their crypto portfolio because they can make huge profits during favourable seasons.
Some popular sh*tcoins you should know are:
Useless Ethereum Token (UET), Baby DogeCoin (BABYDOGE), Dogelon Mars (ELON), Rich Quack (QUACK).
As a crypto investor, it is important to know that most cryptocurrencies are classified differently at different times in the market.
What this means is, a cryptocurrency can start as a Memecoin but can be called an altcoin by others or a sh*tcoin by others. This sometimes depends on its performance in the crypto market & price volatility.
A good example is Dogecoin. It started as a meme coin but grew in value in the crypto market and is recognised amongst investors as an altcoin, while another set of crypto investors view it as a sh*tcoin.
Another example is PEPE. It started as a meme coin with so much potential because of its successful launch and strong community. Unfortunately, this coin was rugged, and now it is referred to as a sh*tcoin.
Knowing which is better to invest in is dependent on your risk appetite.
However, you should know that Altcoins are less volatile, and price swings are moderate. Meme coins are highly volatile, and they have wilder price swings compared to altcoins. sh*tcoins, on the other hand, are super volatile, very unpredictable, and their price swings are out of this world.
Buying Altcoins & meme coins is super easy and can be done on any crypto exchange of your choice. However, as a Nigerian, few crypto exchanges offer the flexibility for you to trade altcoins & meme coins with ease.
One of the reliable crypto exchanges that give this flexibility to Nigerians is Roqqu.
This user-friendly crypto exchange meets the needs of any Nigerian crypto trader. It has over 75 cryptocurrencies listed on its platform. Users can easily buy, sell, and swap any altcoin & meme coin they choose.
The main difference between the types of coins written in this article is the intention behind their creation and the perception of their value.
This is why investors and crypto traders need to do their own research and due diligence before investing in any cryptocurrency, especially for coins that are classified as sh*tcoins or meme coins.
