Can anyone explain the Altcoin paradox?

[jacknimble]

I'm trying to wrap my head around this.

 The only reason to mine for an altcoin is because it provides the opportunity to exchange them for more Bitcoin than mining for Bitcoin directly.

Two forces will act on XYZCoin to eliminate this opportunity for excess profits. First, I will keep producing XYZCoin and selling them in the market, driving down its price.

 At the same time, the additional mining power entering XYZCoin mining will drive up its difficulty, reducing the amount of XYZCoin expected given the hashpower in my mining rig.

So by definition, the value of every altcoin is always going down. Therefore, it is incredibly stupid for anyone holding BC to trade it for any AC.

So, can anyone explain to me, why is it that people trade BC for AC? Why does the AC market even exist at all?

[1715431067]

1715431067

[balu2]

In parts true and that's why low inflation in an altcoin is a must-have.
If your alt has lower inflation than BTC you stand a chance to loose your money slower like was proven by Unobtanium during the bearmarket of 2014.
Also people look for technical innovation in altcoins hoping to find the bitcoin killer.
But 95% is degenerate gambling with vapourware, that's true.
Alts will never vanish, not if btc grows huge and not if bitcoin fails entirely.
I think to make a difference between bitcoin and altcoins is a fault. I'd call it cryptocurrency and btc is not superior to any altcoin. In fact BTC released on the alts market today would not find a buyer.

There are many angles to the altcoin game. Maybe you're a fool for holding btc? My VTC, XPM, LTC, UNO etc profits from the last 16 months say so at least ...
What you gonna do if Bitcoin becomes so centralized it starts to depreciate in value? At what point you start buying an altcoin that solves an issue that can't be solved in bitcoin (like the centralisation trend)?
Basically every problem bitcoin gets itself into is immediately solved by an altcoin.
Man, to be honest with you i couldn't trade btc without falling asleep and currently i shift to alts and fiat due to xt-crisis.

Your first assumption that the only reason to mine for alt is to get more btc is wrong in the first place. Most people mine alts to get btc, right but it's not the only reason to mine alts.

[Dire]

Some alts are based on a protocol that may be utilized in the future ('may',as in 'maybe' being the operative word here.) and so therefore appreciate in value for the holder, like Ethereum/Ether for example.

So mine & sell isn't the only game in town necessarily.

[generalizethis]

If you assume that gaining BTC is the point of other coins, then yes, you've gamed the logic so that most everyone who mines or trades alts is using a faulty strategy.

Now, if you assume that some people view some alternative coins as better than Bitcoin (or fill a role Bitcoin doesn't) and are using Bitcoin's price to leverage more of their chosen coin(s), then your presumption loses credibility.

I'd say many are playing it one way or the other, the smarter ones are doing both.

[kelsey]

The only reason to mine for an altcoin is because it provides the opportunity to exchange them for more Bitcoin than mining for Bitcoin directly.

not at all; alt are an alternative currency for those who don't bitcoin and/or where its heading, many are an improvement on bitcoin. for others they are experiment on where p2p currency could lead.

like your comment you could say people only mine bitcoin for fiat.

[smooth]

I'm trying to wrap my head around this.

There is no paradox spoon

The only reason to mine for an altcoin Bitcoin is because it provides the opportunity to exchange them for more Bitcoin of an altcoin than mining for Bitcoin the altcoin directly.

FTFY

[Graphics]

So by definition, the value of every altcoin is always going down. Therefore, it is incredibly stupid for anyone holding BC to trade it for any AC.

I don't think so! Bitcoin and altcoins are fluctuating a lot! But there are still some promising altcoins. Although it's price temporary drops down, but it will renounce back! If you doubt altcoins , Bitcoin is still the save haven!

So, can anyone explain to me, why is it that people trade BC for AC? Why does the AC market even exist at all?

Ppl intent to get profit from the fluctuations of altcoins' price! IMO there are true committed and active dev who are behind the altcoins and bring new altcoins for the public ! I have to say there are pump and dump coins around! They are just for the quick profit then dispear!

[forlackofabettername]

All the meaningful forward thinking developement happens in altcoin space. "Developement" in Bitcoin is reduced to try to stay on top of altcoin markets. In reality Bitcoin bagholders are scared of altcoins because they know from this corner any day some coin can arise to take no1 position in the crypto markets for whatever reason.

Every bitcoin bagholder will tell you how bitcoin will take over the world and all other coins are shit. That's the bagholder-talk everyone is falling for so easily. I am making good money because i do not listen to the bitcoin brainwash. Bitcoin is the worst of all coins if it had not this hashrate. It's a fossile actually. Being in crypto and not having at least a fraction of money in alts for hedge against btc failure is a fools strategy.

There is no paradox here. Altmarket is in parts legit and has its place. Alts is more risk and more reward and requires more attention and DD from the investor - that's the other side. But then again the longterm charts are fairly no-brainers.

[Crestington]

I appreciate both Alts and Bitcoin but like many other people state, most of the real tech changes are happening in the Alt scene. Sure there are the PD's and outright scams, but there are also a lot of good developers within the space as well. I've met so many great people working in Alts, I could name atleast 20 different developers who I can trust completely. Alts are a learning space, it's to take some risk and try something new, do something that has never been done before and push the envelope but you can't do that with Bitcoin because it's too big and takes a long time to get consensus but working in testnet also won't give you the same insight as running a live project.