Altcoins expand the cryptocurrency ecosystem by offering specialized solutions that Bitcoin does not provide. Many altcoins introduce enhanced privacy features, improved transaction speeds, or governance models that enable community-driven decision-making. They drive blockchain innovation by implementing different consensus mechanisms like Proof of Stake (PoS) and delegated proof-of-stake (DPoS). Investing in altcoins allows portfolio diversification, but it also comes with higher risks due to volatility and regulatory uncertainty.