What is up with all the new alt-coins?

[Luposian]

Does anyone think that all this alt-coin creation will eventually sift out the real deals from the frauds and/or actually establish a real eco-system, where they actually have value, apart from the real-world currencies they compare to?  Any idea as to how long this will take?

[kalus]

I'm mining Dogecoin right now (I have over 1,000 DOGE at the moment).  I've bought 100,000 DOGE and 200,000 Devcoins.  Does anyone here have reason to think either of these, as fractionally low as they are right now, will hit even $0.01 USD anytime in the coming months?  Do you think they will ever be worth $0.50 or more in a year or so?

I don't think the cryptocurrency market operates coherently: at least it doesn't currently make sense to daytrade based on traditional signals.    

There is no trend i can bank on for altcoins.  the cryptos will be either worth a shitton, or nothing at all.  for me, some diversification is prudent, but i am basing my investments mainly on market cap becuase there is so little other information.  

I like to invest based on how i live:  I have never done well with daytrading, and i do not sit well with get-rich quick schemes.  I am a saver, so my strategy is more like 'get rich slowly', which works with my tolerance for risk.  my overall strategy is to mine and hold for 5-10 years.  The only thing i can depend on for cryptos is "they won't be accepted everywhere, but i also can't see bitcoin being accepted nowhere".  the problem is, i can easily see things like earthcoin, terracoin, catcoin, etc. being accepted nowhere, and gradually slipping into irrelevance.  

I see cryptos the same way the forum separates them:  BTC, and everything else.  I consider a BTC investment to have long-term options most of the alt coins do not have.  

I'm looking to be invest into no more than 1,000,000 of each.  I have no interest in becoming a multi-millionaire, unless they somehow go over a dollar on their own, but if they reached even a $0.25, I'd be a very happy person....
Blame this perspective on Bitcoin.  If I hadn't been thinking "If only..." over all the people who are now rich, because they bought in early, I wouldn'tr even be here.  I'm happy my 6.22 Litecoin collection is going back up in value again (over $20/ea now!)... my current investment in Devcoin/Litecoin is now almost $300!  That's not even including my collection of DOGE!

 previous performance is no indicator of future returns, and hindsight is 20/20.  

don't base your position on what's happened in the past:  determine how much risk you can take, and invest accordingly for the duration you feel is most profitable.  I think BTC is 'less riskier' than all of the altcoins, so if you are investing in cryptos but do not tolerate risk well, stick with BTC.  If you are more accommodating to risk, reconcile that most of what you invest in is completely gambling.  IRL, i don't have more than 25% of my equity on loose stocks; i consider that to be gambling too.  if you are a gambler the normal caveat applies:  don't spend what you cannot afford to lose, and don't chase lost money.

because the number of altcoins available varies wildly between coin types, i also don't invest based on number (e.g. 1 million), but i look at how much of the total economy i could control.  e.g. owning 21 bitcoins means I own one millionth of the total bitcoin economy.  

Assuming Bitcoin/Litecoin have hit their practical limits ($1,200/ea and $40/ea), do you think DOGE and Devcoins might reach a threshold of just $1.00 anytime soon in the future or...?

because there is no coherence in how BTC fluctuates, i don't actually think there is a practical upper (or lower) limit for BTC.  1.0btc could reach 40k, or it could be $5.  the main thing retaining the value is the 25 people that own 50% of all bitcoins.  rich people are actually keeping the altcoins more stable than they really should be, if that's any kind of indicator as to how borderline these 'investments' are.

I think Altcoin potential is similar to that found in penny stocks:  it is far easier for a penny stock 5¢ -> 50¢, than for google to go from $1200 -> $12,000.  in fact, any one of these altcoins, as long as they go up, can create the same rate of growth.  

becuase i consider altcoins to be penny stocks I treat them as gambling.  My altcoin $$ is money I can afford to lose.  

my mining strategy mirrors my investment strategy:  i have determined when i break-even on hardare, and devote as many rigs to keep me on my break-even schedule.  Only after that passive income is mined do i start mining riskier coins.  Even if the coins are worth nothing, i will have paid off my hardware and electricity costs a long time ago. 

Do you think DOGE and Devcoins might reach a threshold of just $1.00 anytime soon in the future or...?

I see a problem with perception where people are fixated on 1CAT=$0.01 or 1DOGE=$1.    there is no market force that will center any of these currencies to the dollar.  i believe a strategy that says "hold dog until they're worth a penny each" is shortsighted.  the idea that these coins 'should be worth x' based on difficulty, scarcity, etc. is a self-limiting belief.  

instead, a more prudent investment strategy would be 1DOGE=N, invest X amount of money for Y amount of time, and exit when 1DOGE=2N.  i don't care what N is, only that it doubles.  if you've doubled your money in Y amt of time, then you can compare your DOGE investment to what you would make in stocks, bonds, or mutual funds.  To invest well in cryptos, you must be able to compare it to your other investment.  


 

[markm]

Saying that rich people are supporting their coin's value above what it "should" be is like saying rich nations are upholding their local fiat currency at values higher than it "should" be. The central banks of nations buy and sell their currency to try to keep it in a range they feel comfortable with, why shouldn't the central core of holders of any other currencies do the same?

-MarkM-

[kalus]

Saying that rich people are supporting their coin's value above what it "should" be is like saying rich nations are upholding their local fiat currency at values higher than it "should" be. The central banks of nations buy and sell their currency to try to keep it in a range they feel comfortable with, why shouldn't the central core of holders of any other currencies do the same?

Not exactly, because a nation's goal is to keep the currency, the economy, and the country stable.  currency is indexed to mediate international trade, and to balance exports and imports.

For cryptos, there is no need to index anything because nobody is dependent on coins to run their economy the way UK depends on the £, or US depends on the $.  it can go up to $1000 and down to $400 in a week, and nobody would give a shit.  otoh, if the US dollar fluctuated 60% in a week, there'd be bank runs.  

the US will be here in a year, but there is no guarantee whatsoever the value in DOGE will be here in a year.  plan accordingly. 

Becuase there are no securities laws that protect investors in cryptos, nothing prevents any whale from actively manipulating the market to suit their own goals.  

Only a long-term investor would want to keep growth steady, and retain value over the long run.  How do you assume that the majority of BTC owners aren't selling off their coin a week or a month before you decide to?   

This goes for basically everything except for BTC and LTC, which have market caps too large for a pump-and-dump.  but DOGE?  WDC?  PPC?  all can, and have been manipulated.  

[markm]

That is why I try to start out by piling up buy offers starting at one satoshi and (where feasible) proceeding satoshi by satoshi upwards from there.

So far I have had to jump five satoshis or even 25 satoshis or more at a time for some coins such as IXCoin and I0Coin; really DeVCoin is the only coin I have been able to get this "price floor" concept well-started.

DOGE looked interesting partly because like DeVCoin its price is few enough satoshis that placing buy orders at each satoshi of price all the way up looked like it might be feasible.

-MarkM-

[kalus]

That is why I try to start out by piling up buy offers starting at one satoshi and (where feasible) proceeding satoshi by satoshi upwards from there.

I will only look at my investment based on USD, because i treat crypto investment as i treat all my other investments.  I live on USD, so it makes the most sense to me that way.  

If i have to work with micro-amounts of currency, e.g. i'll deal with kilodoge or megadoge instead of 1doge=0.0000000557USD.  it's the same, but my brain is wired for USD, not µBTC.

one day we might be able to transact goods for doge on the high street.  but that's not today, so i work in common use currency.  

[Francisdoge]

Some of them are serious attempts at alternative currencies to bitcoin.
Some of them are pump and dump schemes.
Some of them are just for fun.

People are exploring the capabilities of the new technology, just as people explored the capabilities of the internet with the first websites on geocities.

Touche'

This new recent pump coins are mean't to be a bubble as fast as they can and then owners of millions of coins dump them in favor of BTC or LTC.

I would like to be smart enough to also put together an half assed altcoin and ride this craze in style, but I'll stick with doge poker for now =P

[markm]

That is why I try to start out by piling up buy offers starting at one satoshi and (where feasible) proceeding satoshi by satoshi upwards from there.

I will only look at my investment based on USD, because i treat crypto investment as i treat all my other investments.  I live on USD, so it makes the most sense to me that way.  

If i have to work with micro-amounts of currency, e.g. i'll deal with kilodoge or megadoge instead of 1doge=0.0000000557USD.  but it all has to add up to $$ in my mattress.

one day we might be able to transact goods for doge on the high street.  but that's not today, so i work in common use currency.  

Ah well then yes we differ a lot in that.

Constantly devaluing coins such as dollars are not really my idea of a good investment, part of why I like bitcoin is that maybe eventually it will let me no longer have to hold constantly-depreciating assets such as fiat...

(If I wanted currency that constantly depreciates I would be using Freicoin, which has "demurrage".)

-MarkM-

[kalus]

Constantly devaluing coins such as dollars are not really my idea of a good investment, part of why I like bitcoin is that maybe eventually it will let me no longer have to hold constantly-depreciating assets such as fiat...

It sounds like you're in for the long haul, and that's your investment strategy.  That's fine, but that's not mine.  

I have about 60-70 years of life to live, and I believe for a significant portion of my remaining years, so called 'fiat' currencies will still be the dominant method of transaction.  I am not ideologically committed to this position, but being as pragmatic as possible for 2013.

also, as an aside, i think anybody that uses 'fiat currency' in a derisive way is lol.   It's just a polarizing, adolescent way of looking at finance, and it's hypocritical to be paid in 'fiat currency' and use 'fiat currency' to live.  I bought my mining rigs with 'fiat currency'.  My education was paid for with 'fiat currency'.  the reason i'm here in a first world country on a computer with an internet connection talking with you is because of 'fiat currency'.  

Then again, i am investing in cryptos because i want to make money.  If you are investing in cryptos because of ideology, more power to you, brother.

[markm]

I use CAD in local supermarkets and corner stores and gasoline stations and suchlike, I just do not consider it the best place to store wealth aka a good place to invest.

I buy it as I am forced to aka as I need it, albeit with some padding to try to avoid getting painted into a corner where I need more of it sooner than I am likely to be able to buy it at a good price.

For example just recently I decided to go ahead and re-wire my country-house, and got myself into some time-pressure whereby I am not sure I will be able to buy CAD at one thousand CAD per bitcoin or better so I am somewhat pressured to consider buying CAD at higher prices than that if I am to have enough CAD on hand soon enough to match the electrician's anticipated availablity-to-do-the-work date.

Basically though that mostly means I did not have enough padding; I "should" have secured the requisite CAD first, so that I was sure I was getting it at a "nice" price, before starting to get pinned down to any particular schedule as to when to go about rewiring the house.

-MarkM-

[kalus]

I use CAD in local supermarkets and corner stores and gasoline stations and suchlike, I just do not consider it the best place to store wealth aka a good place to invest.

I buy it as I am forced to aka as I need it, albeit with some padding to try to avoid getting painted into a corner where I need more of it sooner than I am likely to be able to buy it at a good price.

For example just recently I decided to go ahead and re-wire my country-house, and got myself into some time-pressure whereby I am not sure I will be able to buy CAD at one thousand CAD per bitcoin or better so I am somewhat pressured to consider buying CAD at higher prices than that if I am to have enough CAD on hand soon enough to match the electrician's anticipated availablity-to-do-the-work date.

Basically though that mostly means I did not have enough padding; I "should" have secured the requisite CAD first, so that I was sure I was getting it at a "nice" price, before starting to get pinned down to any particular schedule as to when to go about rewiring the house.

-MarkM-

Ultimately, we agree on the same ideals.  money is too important to leave up to the harper government.  

however, i have about 3 dozen video cards i gotta pay for.  

I'm certainly a hedger; i will have some position in BTC and a few others long term because the long term odds are intriguing, but i view the majority of my work right now as a 5-10 year investment.  

However, if i need to liquidate for a house reno, i'd plan a month, or year in advance and dollar-cost-average to CAD.  For me, the money is made in the investment rather than currency arbitrage.  I also was brought up to have cash on hand for a rainy day, because it will always rain.  in 2013, i'd shit bricks if the rainy day fund was dependent on bitcoins.  

The rainy day fund is in cash right now because in 2013, I don't believe there is coherence in the value of BTC (i.e. there was no way to know if BTC would have skyrocketed past $1200 when you were doing the elx, or crashed shortly thereafter.)  I believe that waiting 10 years will iron out risk of day-to-day fluctuation, and that the overall value in BTC will rise.  I am not built to daytrade. After i'm done mining, i won't be checking the price of BTC daily or weekly anymore.  I think that not every country will recognize BTC, but it's unlikely that NO country will recognize BTC.   This should happen within a 10 year timeframe and help stabilize BTC.  It needs to be used as a currency, and not a speculation vehicle. (hi dogecoin!)

I know i won't get the best price, but i'm in it for the long haul.  that means i can sleep easy, and that's a good compromise for me.  

going back to altcoins:  The Altcoin market is a totally different ballgame than BTC.  parodies of parody coins are being churned out.  speculators (IN THIS THREAD!)  have openly talked about making mad stacks by starting their own crypto.  anybody can do it.  this will devalue all but a handful of coins in the future.   Nobody has a clue which ones will survive, but some feel the need to spend effort to promote the coin they're positioned heavily in.  

Currently, auto-switch mining pools are making all of the altcoins irrelevant.  If i can make 70-90% on an auto-pool what i could get speculating on a single coin (e.g. 100% on doge), i'd rather do that and let the machines run unattended for months.  I don't like picking at investments.  I think the auto-pools are the distilled, anonymous, dystopian future of all alt coins.

but dogecoin will be around because hey

[markm]

Yeah but DOGEcoin isn't secure, not even as secure as Litecoin.

If it overtakes Litecoin in hashing power, reliably not just a moment at a time as it appears on some topsite for a moment, then maybe it will become "the" scrypt coin. But that might rest mostly on whether DOGE miners buy more scrypt-ASICs than Litecoin miners do and whether migrant miners aka blockchain-gangbangers buy more such ASICs than either-or-any coin's "native" miner-population.

That is a lot of why I buy ASICs: I cannot rely on joe sixpack to include all my coins in his merged mining, so I have to become a major miner myself (or come up with software for a pool that will distribute all the various coins to the miners) if I hope merged mining is going to turn out to be a good and robust way of securing more than just one chain (the parent chain; bitcoin) and thus allow the coins that moved to Open Transactions in order to avoid the insecurity of the blockchain format to move back to being blockchain-based.

-MarkM-

[kalus]

That is a lot of why I buy ASICs: I cannot rely on joe sixpack to include all my coins in his merged mining, so I have to become a major miner myself (or come up with software for a pool that will distribute all the various coins to the miners) if I hope merged mining is going to turn out to be a good and robust way of securing more than just one chain (the parent chain; bitcoin) and thus allow the coins that moved to Open Transactions in order to avoid the insecurity of the blockchain format to move back to being blockchain-based.

mainly i prop doge up as a joke, as the currency was originally intended.  I also am positioned in litecoin, but i think litecoin is obsolete but they don't know it yet.  

I find ASICs really interesting becuase they are disruptive technology.  they also spell the end of my GPU farm, but not as quickly as they did for BTC.  still, i feel the optimal time is now to add new hardware, before the ASICs gain widespread use.  who knows how many litecoin variants will be around by then, or the difficulty of mining coins that give good returns.  there isn't enough money in the world to live up to 99% the ongoing speculation for any of these altcoins.  this is where the bubble is. 

by end of 2014, BTC will be out of reach for the basement miner.  the difficulty arms race may turn the last few blocks into a multinational joint venture.    on Scrypt coins I don't think i want to chase the same thing with ASICs, so i'm putting the money into hw now rather than in the future.  

[r3wt]

Dogecoin is a SHT wanna be

[markm]

by end of 2014, BTC will be out of reach for the basement miner.  the difficulty arms race may turn the last few blocks into a multinational joint venture.    on Scrypt coins I don't think i want to chase the same thing with ASICs, so i'm putting the money into hw now rather than in the future.  

Basement miner yeah, unless they have an underground river or fast flowing sewer under the house.

Rooftop though should last longer, having access to sun and/or wind...

Next after re-wiring is solar and wind gear...

I want some kind of controller that can fire up more and more mining gear as the sun or wind increases, and tone down as they decrease, to save on batteries and on grid power.

(Use the power while it is coming in aka store it as coins instead of storing it on the grid or in batteries.)

-MarkM-

[kalus]

Basement miner yeah, unless they have an underground river or fast flowing sewer under the house. Rooftop though should last longer, having access to sun and/or wind...

I think petahashes and yottahashes will be done in developing countries that offer subsidised or free power for tech speculators, and sooner than expected.  A handful of desktop asics, no matter how they're powered, will not generate fractions of coins in the near future.

[markm]

That is why it is my country-house that I am re-wiring no a place in town. Rooftop is too small, with the coutry-house as I fill up it's land I can acquire more land.

Though a hot spring in Iceland sounds good too, or even a cold one.

Subsidies though ouch, trust governments to mess with things one way or another eh?

On the bright side though maybe government-operated and government-financed mining operations might be less likely than others to attack chains instead of mining them. Maybe. Maybe the various attacks will simply be cybercrimes like various other cybercrimes, full prosecutable under the law if you can track down who is doing them.


-MarkM-

[kalus]

Subsidies though ouch, trust governments to mess with things one way or another eh?

That's not a government thing.  that's a crony capitalism thing.   It's also a developing country taking control of their own technological advancement. and i think it's going to happen in 2014.  

On the bright side though maybe government-operated and government-financed mining operations might be less likely than others to attack chains instead of mining them. Maybe. Maybe the various attacks will simply be cybercrimes like various other cybercrimes, full prosecutable under the law if you can track down who is doing them.

Governments aren't going to step in to control bitcoin; they don't need to becuase of the protocol.  they're going to make sure everything's trackable, just as the protocol outlined.  e.g. it's ironic Catcoin chose "cryptographic ANONYMOUS transfer" as a motto.  

Also, i don't really see attacks on the bitcoin blockchain in 2013, only on altcoins.  the altcoin culture is taking free market with no regulation to its maxima.  Every time there's a pump and dump, a few people get rich, and many people lose.  The problem is, every person that speculates on currencies 'to the moon!' will have to sell it off to someone else, and everyone wants to be the person that benefits from the pump.  it's a zero sum game:  the value has to come from somewhere.  it's not coming from Cameron Winklevoss.  The ultimate failing of an unregulated market are these pump and dump ripoffs.  

By comparison, the amounts taken from hashcows and dogewallet are infinitesimal compared to how much has been fleeced by a lot of altcoin speculation.  Theft is a crime, cyber or not.  i'm more concerned by the active manipulation of the altcoin market that cross into unethical behaviour, but are not illegal.  Even as an investor, i have a hard time tolerating blatant manipulation.