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March 28, 2014, 03:37:29 AM |
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Just wanted to share my observation regarding the way the altcoin scene has been shaping and evolving. I started watching altcoins around early 2013 when I got into Bitcoin, so there's probably some history before that which I'm missing. I've divided the evolution up into some distinct phases.
Stage 1: Technical differentiation
The first wave of altcoins attempted to stand out through their technical differences. The most common selling point was the block interval, which progressively became faster and faster until it hit the limits of practicality (eg. 30 second coins). Other common tweaks were: different proof-of-work algorithms, different inflation schedules / block reward schemes, and proof-of-stake.
By the end of this phase, there were hundreds coins with different combinations of technical parameters. It was becoming increasingly hard for any new coin to attract a following based on technical parameters alone.
Stage 2: Popular appeal This phase kicked off with Dogecoin. Dogecoin rose out of the sea of hundreds of altcoins and obtained a mass following and significant market value within weeks. This was all on the back of a popular joke. Dogecoin proved that marketing and popular appeal was key to building a successful coin. Following dogecoin, many new popular coins emerged with professional-looking websites & logos, and funny themes (eg. Kanye Coin, Kitteh Coin, Bro Coin, Ron Paul Coin etc). By the end of this phase, there was a coin for so many different memes/animals/people, it again became difficult for any new coin to stand out.
Stage 3: Airdrop Coins This began with Auroracoin which, like Dogecoin, proved a new formula for success and caused many to try to emulate it. This time the formula was to associate the coin with a specific nation or community, premine a large portion of the coins, and announce a date when the coins would be "airdropped" or distributed for free to all members of the target community. Following the surge in value of Auroracoin, many other coins have replicated this same pattern, such as Spaincoin, Aphroditecoin, and Silicon Valley Coin.
Anyone got any thoughts/comments on this observation of the three trends? Maybe there were other phases that I'm missing. What's next after we get saturated with too many airdrop coins?
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