I have been writing about blockchain, cryptocurrency and tokens for a little over three years.

In that time, bitcoin has flourished, crashed and grown again. Hundreds of new projects have emerged; the SEC has cracked down on token speculation; and the idea of "distributed apps" has gained increasing legitimacy. Entrepreneurs have struggled to separate cryptocurrency coins (investment-based financial assets) from cryptocurrency tokens (utility-driven assets, essentially credits to access a service).

The market for cryptocurrency has grown to hundreds of billions of dollars. At time of writing, the top 14 cryptocurrency projects were all worth at least $1.2 billion each with bitcoin, the granddaddy of them all, worth more than $186 billion.

My interest in this space has always come from the perspective of a lawyer and political economist. Not to editorialize, but blockchain is weird. Advocates hail it in frankly messianic terms, claiming it can do anything from feeding the hungry to fixing global warming. Projects such as Ethereum have laid next-generation groundwork for distributed computing, and these days you can find a bitcoin index on the New York Stock Exchange.

But for all that, blockchain is, ultimately, little more than an exceptionally clever way to run a database. What's more, for some reason virtually every major project in this space creates a cryptocurrency. This isn't necessary. There's nothing about blockchain data storage that requires creating a virtual currency and miniature economy, but a culture has grown around this technology that seemingly demands it.

These projects are marked at once by their enormous ambition and, typically, their lack of grounded purpose. While a few blockchain-related products address real world needs such as global supply chain tracking or easing foreign currency swaps, others seem to start primarily from the techno-utopian dreams of their founders. No credible economist will argue that the world needs a decentralized currency built to self-trigger catastrophic deflation, yet at time of writing each bitcoin sells for $10,429. No one has yet explained why utility tokens, which users buy at floating market prices to access a related service, make more sense than flat-rate credits.

Yet there it all is.

This is what makes blockchain so fascinating. It is a legitimately innovative technology that, so far, people have mostly used to try and re-invent currency again and again. It is a market with as-yet no proven value and hundreds of billions of dollars in worth. It is a field of interesting business opportunities, passionate advocates, and more con artists and grifters than CBD oil.

And it all starts with altcoins.

What Is an Altcoin?

Depending on who you ask, an altcoin is either:

• Any cryptocurrency other than bitcoin;

• Or any cryptocurrency other than bitcoin and Ethereum.

That's it. Altcoin just means "alternative coin," or an alternative to the mainstream, leading cryptocurrency/cryptocurrencies. How you choose to define altcoin actually says a lot about your perspective on the cryptocurrency market.

Why Bitcoin?

For many people this means anything but bitcoin because, by value, bitcoin is almost the entire cryptocurrency market. At time of writing the entire cryptocurrency market was worth approximately $271 billion. This split into two sections:

• bitcoin - $186 billion

• Every other cryptocurrency combined - $85 billion

A single bitcoin sold for $10,429 at time of writing. A single Maker token, the second most valuable cryptocurrency on a per-coin basis, sold for $508. By value, bitcoin is the cryptocurrency market.

All of which says nothing about bitcoin's cultural dominance.

This is the project that started blockchain and cryptocurrency in the first place. Despite some early theorizing, bitcoin was the first project to publicly use blockchain coding and the first example of a cryptocurrency as we currently think of them. When it launched in 2008, anonymously under the common Japanese pseudonym of Satoshi Nakamoto, bitcoin essentially created the concepts of blockchain and cryptocurrency out of thin air.

As a result, many advocates argue that "altcoin" must refer to any cryptocurrency that is not bitcoin.

Why Bitcoin and Ethereum Both?

Ethereum is the second most valuable cryptocurrency on the market. At time of writing it had a market cap (the total value of all Ethereum tokens) of approximately $20 billion. This is a fraction of bitcoin's worth, of course, but more than double the next most valuable cryptocurrency.

More importantly, Ethereum is arguably the second major post in the development of blockchain technology and cryptocurrency.

bitcoin offers cryptocurrency "coins." These are digital assets that only work as a pure currency. A single bitcoin does nothing other than secure its own value. It prevents duplication and counterfeiting, but otherwise sits inert in a holder's account until they spend the coin.

Ethereum, and the project's associated tokens "ether," create what are known as self-executing smart contracts. This is code which looks for triggers and can execute transactions on its own. If you buy a pizza, for example, on the Ethereum platform it will:

• Record the transaction;

• Monitor for delivery;

• And upon confirmed delivery automatically transfer the agreed-upon payment in ether tokens.

In doing this, Ethereum created the idea of blockchain that "does" something. It has created a new industry of distributed apps (Dapps), which run entire applications through code executed on a blockchain database or data stored on one.

As a result, other advocates argue that Ethereum has made itself as essential to the history of blockchain and cryptocurrency as bitcoin.

What Are Some Major Altcoins?

This is… tricky.

The problem with assessing altcoin value is that this market remains largely a source of unfulfilled potential from a consumer perspective. No blockchain project has a significant (if any) retail or consumer influence, and no pure cryptocurrency has proven its value from a perspective of economic viability.

Simply put, no project has yet answered the question "why do we need this?"

From an economics standpoint, this opens up the question of value vs. worth. A project's utility is a question of worth. It's what real-world application this product brings to the marketplace. What can it do for you, the consumer? What theoretical use does it have? This article does not mean to say or even imply that blockchain projects have no worth, simply that they have not yet demonstrated that worth from a marketplace perspective.

A project's market capitalization is a question of value. It is, essentially, how much do people spend on this product or service. From that perspective there are many, many important altcoins by any definition. These include, but are certainly not limited to:

• Ripple

The project Ripple launched with XRP, a decentralized cryptocurrency that Ripple created. This is, arguably, the most useful application of a cryptocurrency. It is a global payment system designed to help individuals and institutions more easily exchange foreign currencies, using its cryptocurrency as the basis for these transactions.

At time of writing the project was worth approximately $11 billion.

• Bitcoin Cash

An alternative to bitcoin based on a slightly different version of the underlying technology, bitcoin Cash also offers a pure cryptocurrency. Advocates argue that it is a more advanced cryptocurrency. The market says it's worth $5 billion.

• Litecoin

Another pure cryptocurrency, Litecoin can process transactions four times faster than bitcoin. Given that bitcoin still takes several minutes to process a transaction (compared to the seconds it takes Visa (V - Get Report) to run your credit card) this still needs work, nevertheless it is an evolution in the technology. This has made this cryptocurrency worth more than $4.5 billion at time of writing.