If you browse altcoin related sections of this forum you're probably already seeing things like the following on a daily basis.
Bitcoin doesn't have any future, crypto 2.0 is on the way to kill it. Bitcoin has ZERO innovation, look at all the innovative second generation currencies out there. Bitcoin's price is falling because people started realising innovative coins are worth more.X innovative coin is undervalued because of Y feature it has N coin with a bigger marketcap doesn't haveAnd the best of em all,
Bitcoin is dead.All of the above claims are bullshit in it's pure form. Besides the fact that anyone who says something like that is either a paid shill, or someone who was stupid enough to invest so much into a cryptocurrency he has to self advertise it.
But let me just explain why all this is nothing more than unrealistic optimism about those
innovative currencies.
1. They're all closely tied to bitcoin.
Go have a look at coinmarketcap.com right now, on November 02, 2014 bitcoin had a -4% on it's price. What was the result? All other markets were affected as well.
Let's have a look how some of those
innovative alternatives did.
Wow, I guess today was a really unfortunate day for innovation,
right?Probably not. Let's see why...
2. Trading
There's a reason those markets are strongly dependent on bitcoin's price movement. The fact that every single time bitcoin's price is down altcoin markets are affected as well isn't a coincidence. In almost all cases, 50% and most of the times even more of the trades are executed in bitcoin markets. For example, only about 0.51% of Monero's trades are done in FIAT markets. BitsharesX might be an exception to that, having more than 70% of it's trades in CNY markets. But still, graphs suggest that it always suffers from the biggest among the 2.0 family losses whenever bitcoin's price goes down.
3. Volumes and unrealistic market caps
Innovative projects seem to consider PoS distribution something outdated and additionally not responsible towards the environment. What's their solution? They let people buy loads of coins at once and send their money directly to the developers receiving unlimited innovation, euphoria, sparkly designs, and hype in exchange. Many projects manage to maintain some sort of hype and keep their supporters hooked for quite some time, that's probably why we often see such small trading volumes when we compare those currencies to other altcoins (see LTC, DOGE) that aren't even close to being innovative according to their terms. But this makes their market cap unrealistic since most of the coins that exist out there have never entered a market but still add up to the total market cap. This makes such coins extremely vulnerable to big dumps, and a recovery would also be unlikely (See ripple, Monero and many other examples).
In conclusion, all altcoin markets, whether they're the market of a
futuristic payment platform that is here to
take the concept of bitcoin even further or the market for a shitty project that created a bitcoin clone to crowd fund the venture indirectly they are closely dependant on bitcoin's movement. If bitcoin is nothing, they're nothing as well. No matter how revolutionary they are, there's no space in the crypto market for them to grow bigger than what bitcoin has become, not now, not in the near future and probably not even in the upcoming decades.
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