What Are Forked Coins, Altcoins, and Competing Cryptocurrencies?

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Cryptocurrency markets can feel overwhelming at first glance. With thousands of digital assets listed on exchanges, it's easy to wonder: Why are there so many coins? Beyond the well-known Bitcoin (BTC), you’ll see names like Bitcoin Cash (BCH), Bitcoin SV (BSV), Ethereum (ETH), and Ethereum Classic (ETC). At first glance, they might seem like knockoffs or poorly named clones. But in reality, many of these coins have deep technical and historical roots tied to their parent blockchains.

Let’s explore the differences between forked coins, altcoins (often called "shitcoins"), and competing cryptocurrencies, and how each plays a unique role in the evolving crypto ecosystem.

Understanding Forked Coins

Forked coins originate from existing blockchains through a process known as a blockchain fork. This occurs when developers or community members decide to make changes to a blockchain’s protocol, leading to a split into two separate chains.

Two major types of forks exist:

Why Do Forks Happen?

To understand why forks occur, consider the limitations of early blockchain design.

Bitcoin, for example, originally had no fixed block size limit. However, to prevent spam attacks and conserve network resources, Satoshi Nakamoto set a 1MB block size cap. While sufficient in 2009, this limit became problematic as adoption grew.

With each block taking about 10 minutes to mine and holding roughly 4,000 transactions (at ~250 bytes per transaction), Bitcoin’s network can process only around 7 transactions per second (TPS). Compare that to payment giants like Visa, which handles thousands of TPS—and you begin to see the scalability issue.

When transaction volume exceeds capacity, users face delays and rising fees. This bottleneck sparked debate within the Bitcoin community: How should we scale?

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The Great Bitcoin Fork Debate

The debate led to two proposed solutions—mirroring our earlier analogy:

  1. Temporary Fix (Soft Fork): Introduce Segregated Witness (SegWit) to free up space by separating signature data.
  2. Radical Redesign (Hard Fork): Increase block size permanently.

Not everyone agreed. In 2017, proponents of larger blocks created Bitcoin Cash (BCH) via a hard fork, increasing block sizes to 8MB (later 32MB). This allowed faster, cheaper transactions—but came at the cost of decentralization trade-offs.

Similarly, Ethereum underwent a pivotal hard fork in 2016 after The DAO hack, where $50 million worth of ETH was drained. The Ethereum Foundation decided to reverse the theft by forking the chain—creating Ethereum (ETH) and leaving the original chain as Ethereum Classic (ETC).

While controversial, ETH’s recovery proved successful. From post-fork lows, its price rebounded strongly, now powering smart contracts, DeFi, and NFTs worldwide.

What Are Altcoins ("Shitcoins")?

The term altcoin simply means “alternative coin”—any cryptocurrency other than Bitcoin. However, colloquially, it often refers to low-value or speculative tokens with little utility.

Some altcoins are created by copying Bitcoin’s open-source code with minor tweaks—changing block time, supply cap, or mining algorithm—and launching without meaningful innovation.

Examples include:

While some altcoins begin as jokes or copycats, others mask themselves as legitimate projects while operating as Ponzi schemes or outright scams. Cases like "Yaou Coin," "Wuxing Coin," and "OneCoin" were exposed as fraudulent operations masquerading as blockchain innovations.

These projects typically share red flags:

Always perform due diligence before investing in any altcoin.

The Rise of Competing Cryptocurrencies

Not all alternatives to Bitcoin are shallow imitations. Some are true competitors built with superior technology or novel use cases.

These are often referred to as competing cryptocurrencies—projects designed not just to mimic Bitcoin, but to improve upon it or serve entirely new functions.

Notable Examples:

Litecoin (LTC)

Launched in 2011 by Charlie Lee, Litecoin uses the Scrypt hashing algorithm instead of SHA-256, enabling faster transaction confirmations (2.5-minute blocks vs. 10 minutes). It was one of the first serious attempts to create a “lighter” version of Bitcoin—ideal for daily payments.

Ethereum (ETH)

More than just digital money, Ethereum introduced smart contracts—self-executing agreements coded directly onto the blockchain. This innovation unlocked decentralized finance (DeFi), NFTs, DAOs, and more.

Today, Ethereum remains second only to Bitcoin in market capitalization—and far ahead in developer activity and ecosystem growth.

Other strong contenders include:

These aren’t mere clones—they’re ambitious platforms aiming to redefine what blockchains can do.

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Frequently Asked Questions

Q: Is every forked coin valuable?

Not necessarily. While some forks like BCH and ETC have maintained long-term value due to active communities and use cases, others—such as Bitcoin Gold or Bitcoin Private—faded quickly due to weak development and low adoption.

Q: Are all altcoins scams?

No. While many low-cap altcoins lack substance, others like Chainlink (LINK), Polygon (MATIC), and Uniswap (UNI) provide real utility in areas like oracle services, scaling solutions, and decentralized trading.

Q: Can a hard fork damage a cryptocurrency?

It can cause short-term uncertainty and price volatility. However, if managed transparently and supported by key stakeholders (miners, exchanges, developers), a hard fork can strengthen a network by resolving critical issues.

Q: How do I tell if a coin is a fork, an altcoin, or a competitor?

Ask:

Q: Should I invest in forked coins or competitors?

Invest based on fundamentals: team credibility, technology, adoption rate, and long-term roadmap—not hype. Diversify cautiously and never invest more than you can afford to lose.

Final Thoughts

The crypto landscape is diverse—not chaotic. Each category serves a purpose:

Understanding these distinctions helps you navigate the market wisely. As blockchain technology matures, the lines may blur—but the core principles remain: decentralization, transparency, and community governance.

Whether you're holding BTC, exploring ETH upgrades, or evaluating new Layer 1 blockchains, staying informed is your best defense against misinformation and risk.

👉 Stay ahead with real-time insights into fork events, new altcoin launches, and emerging competitors.

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