I keep reading comments from people who think LN (Lightning Network) will kill altcoins. I'm always like, "What???"
These kittens are also perplexed that kind of thinking
That's like thinking going from not having exchanges to having exchanges would kill altcoins. It's exactly the opposite. Atomic swaps make it easier to move from coin to coin and can be more seamless than the tedium of exchanges. We're on the verge of transitioning from dirt roads to high speed rail. Personally, I think three types of general coins (those without a specific purpose beyond being money) stand to benefit from this.
I think it all starts with
Litecoin, and Charlie Lee was one of the first to recognize and start gearing up to take advantage of the opportunity. Litecoin doesn't just want to benefit from easier transitions to and from Bitcoin, they want to operate as the backbone of Bitcoin, transactions would go from Bitcoin into LN and atomic swap to litecoin for cheaper transactions. End users spending satoshis need never even know they're using another blockchain, this can happen invisibly when their payment processor lumps millions of payments together into LN behind the scenes.
Fee avoidance is inevitable as Bitcoin grows, and if you read
Charlie's piece from nearly a year ago, you can't help but flip the altcoin hand-wringer's concerns around and wonder what happens as fee avoidance becomes easier and more seamless through LN... who will mine Bitcoin as the fees dry up? Their fees will have to go higher and higher to maintain the security, which will cause more and more fee avoidance, which sounds like a death spiral. I predict Bitcoin will inevitably have to go Proof of Stake when the LN dust finally settles, but that it won't really be worse for wear because of it and may well continue to be the gold standard other networks have to interact with to reach users, and the miners can go to BCH or eventually, other alts. LN is, in other words, just the next step in the smoothing of transitions that have been smoothing out since the first altcoin arrived. I say lean into it.
But I think there's room for more than Litecoin, which is currently on a trajectory to get a lot pricier than the bargain it is per coin now. I think there's room broadly for at least two more backbones. One institutional (multinationals and banks) backbone and one everyday item backbone (McDonalds, gasoline, vending machines, movie rentals etc). On the institutional side, in order to comply with the laws of developed nations, large organizations will need levels of privacy bitcoin doesn't offer. On the everyday item side, getting quick cheap confirmations, even faster than litecoin will be valued, but a secured network is still necessary.
Right now I think
Zcash has the inside track to be
the institutional backbone. To start with, it has its own corporate structure that will make other corporations in highly regulated industries more comfortable. Some crypto purists see that as a big negative, but birds of a feather flock together and banks are going to want more certainty about who they're dealing with than the kind of garage band development teams that loosely work on other cryptos can provide. In addition, Zcash has actively pursued not pure privacy or dilution, but selective transparency that allows compliance not only with requirements to keep customer data private, but also makes it easier to allow companies to comply with their own need to share certain information internally and then share with government agencies as well. From the ground up, Zcash was practically made to be a vehicle for legitimate institutions.
For
the everyday item backbone, I think
Digibyte has the inside track. Faster and cheaper than Litecoin and with a strong focus from the start on transaction capacity, DGB doesn't scrimp on security either. It's 5 algorithm mining approach drives the cost of 51% attacks much higher as you need not only 51% of 4 out of 5 of the algorithms, but you need 93% of one of them. Beyond the sheer cost of the attack, there's additional logistical challenge of gathering all the right kinds of hardware necessary to levy it, further reducing the likelihood of it occurring. DGB has also been around and actively developed for years, generating not just tech for itself, but also having other coins adopt its innovations. It's a solid choice to handle every chocolate purchase with the speed that purchasing chocolate requires.
What coins do you guys see fulfilling these niches? Are there other general payment niches you see arising?
