Altcoins represent the new gold rush that's taking currencies beyond just being currencies. They can have value but now they're useful for other things too!
You might think of bitcoin as an alternative to regular fiat currency and therefore might be tempted to call it an "altcoin" but in actual fact the term also means any cryptocurrency that came along after bitcoin.
"Altcoin" refers to digital currencies-and it's worth noting that the correct term for such coins is actually "tokens." The ERC-20 tokens that rely on the Ethereum blockchain are the best-known altcoins, and since bitcoin came along in 2008 their number has risen to over 2000. Some were just modifications of bitcoin, the technical term for which is a "Hard Fork". Some of them were created simply as borderless currencies while others have specific functions too, such as the ability to manage smart contracts.
When an Altcoin is forked from bitcoin it is often mined in the same way, meaning that it uses the proof of work consensus algorithm, but that isn't the only method that's used. Alternative approaches include Proof of Stake, Delegated Proof of Stake, Proof of Burn, Proof of Authority, and Delayed Proof of Work.
Fans of altcoin will sometimes take exception to the term, seeing it as demeaning in some way, but it's already entered into general usage-at least in investment circles-in an entirely neutral way. They shouldn't worry. If altcoin detractors really want to make their feelings known then they usually employ much more creative and colorful language.