Bitcoin vs. Altcoins – projected Marketcap

[1miau]

From a speculative point of view, it is essential to understand how to review market capitalisations of cryptocurrencies. Because current market capitalisations will only partially reflect if a cryptocurrency is suitable as a good store of value long term.  
Current market capitalisations are very deceptive, especially for Shitcoins – caution!


Current market capitalization vs. projected market capitalization


When considering market capitalisation, a distinction should be made between current market capitalisation and projected market capitalization.


Current market capitalisation only includes all coins having so far entered the circulating supply. Potential inflation by additionally issued coins is not taken into consideration here.


Very important to know:

• Circulating supply:
  Current circulating supply (also including inaccessible coins, such as from lost private keys, etc.).
• Total supply:
  Current number of all existing coins, including coins which are currently already existing but still blocked by coin developers (e.g. at XRP) or coins which are not yet mined. Burnt coins are not part of it, as such coins do not exist (anymore).
• Max(imum) supply:
  The definitive (coded) maximum number of coins which can ever exist. For some coins, total supply and maximum supply are identical.
• Infinite supply:
  Some coins don’t have a caped supply at all and there will be issued more coins constantly.
  For such coins, we need to look up properly how many of them will be in circulation at some point of time because such coins are at risk of MASSIVE INFLATION.  
  

Keep in mind when a circulating market capitalisation is given because it’s very deceptive, as it only depicts a temporary state of coins in circulation and possibly many new coins will come inti existence later.


It is more reliable to consider an adjusted market capitalisation, where we will always choose a time in the future and look what a specified circulating supply and the resulting market capitalisation will look like.

= > Adjusted market capitalization = choosing a time in the future (for example 2050) and comparing how the projected circulating supply and the resulting market capitalisation will look like between two or more coins.



Example Bitcoin:

For example, it is known that Bitcoin will have approximately 20,980,000 Bitcoin in circulation in 2050, which at current prices of $20,000 would result in an adjusted market capitalisation of approximately $420,000,000,000. Compared to the current situation of a market capitalisation of approx. 382,800,000,000 USD (at 19,140,000 BTC), it would only be a difference of just under 10 percent.
The closer this number goes to 0, the better for storing value. Practically, all other competitors of Bitcoin have significantly higher numbers here.



Example Polkadot:

Polkadot is considered a highly inflationary altcoin based on nPoS (which is practically dPoS). According to current sources, Polkadot's inflation amounts to about 10% annually, which depends on how much Polkadot is staked. But normally it’s around 10% annually.
In addition, excess Polkadot from inflation can circulate back to Polkadot founders even with a different amount of staked Polkadot, as well as confiscated Polkadot, which can be used or burned by Polkadot developers.

However, there are only a few sources about Polkadot's inflation, since Polkadot's statements of most official sources are limited to the first year or Polkadot even completely deleted most previously available sources, like here: https://w3f-research.readthedocs.io/en/latest/polkadot/economics/1-token-economics.html#inflation-model.
It’s not available anymore.  
Which is definitely a very big red flag!!!!
Some information is only available on third-party sites anymore which analyzed Polkaot’s documents when they were still up, such as here: https://www.coinbase.com/de/cloud/discover/solutions/polkadot-token-economics.

Currently, Polkadot has a circulating supply of approximately 1,150,000,000 Polkadot at a price of $7.36 per Polkadot, which results in a current market capitalisation of approximately $8,464,000,000.

Assuming 10% annual inflation, the amount of Polkadot would increase to an amount of about 16,500,000,000 Polkadot by 2050, which is 12 times more compared to now.
At current prices of $7.36 per Polkadot, it would mean an adjusted market capitalisation of approximately $120,000,000,000, which would be worrisome 1400 percent above today's market capitalisation.
As a reminder: Bitcoin is only just under 10 percent here.
Anyone who knows about markets can only conclude that the price per Polkadot will decrease massively by 2050. Considering the same market capitalisation in 2022 vs. 2050, the price per Polkadot would have to decrease from $7.36 today to $0.51 (!) in 2050.

Conclusion: Polkadot is an inflationary Shitcoin where large quantities of Polkadot Coins coming into circulation in the future will go to rich stakers...
The price per Polkadot Coin will drop massively when looking at Polkadot's adjusted market capitalisation (for example 2050).


Summary

Finally, it can be said for solid coins, such as Bitcoin, current market capitalisation and adjusted market capitalisation are very close. For inflationary Shitcoins, current market capitalisation and adjusted market capitalisation is far apart.


Predictability of projected market capitalisations


Predictability of the adjusted market capitalisation means if it’s possible for us to find out if the amount of a certain cryptocurrency in circulation will be known in the future. We will need the number of coins in order to be able to classify a certain market capitalisation in the future.

If the amount of coins in circulation of a cryptocurrency cannot be predicted properly even in 20 years, such a cryptocurrency can be considered dangerous or unpredictable and this is an important reason to avoid this cryptocurrency. Because Altcoin developers already know why they are not disclosing such important information.
If there is no predictability of the projected market capitalisation, you therefore buy the cat in a bag.


Lesson of my article: analyzing the long-term assessment of a cryptocurrency as a store of value – by evaluating market capitalisation – and if the Altcoin can match market leader Bitcoin.


Translations:

Language	translated by	Title
___________________________	_____________________	_______________________________________________________________________
العربية (Arabic)	Nalain420	البيتكوين مقابل العملات البديلة – القيمة ا&
Deutsch (German)	1miau	Bitcoin vs. Altcoins – bereinigte Marktkapitalisierung
Français	paid2	reserved
Nigeria (Naija)	Dzwaafu11	Bitcoin vs altcoins-projected marketcap.
Română (Romanian)	GazetaBitcoin	Bitcoin vs. criptomonede alternative – capitalizarea de piață proiectată
Urdu (Pakistan)	Publictalk792	بٹکوئین بمقابلہ آلٹ کوئینز-متوقع مارکیٹ ک

Reserving new translations is currently available.

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[Upgrade00]

Predictability of the adjusted market capitalisation means if it’s possible for us to find out if the amount of a certain cryptocurrency in circulation will be known in the future. We will need the number of coins in order to be able to classify a certain market capitalisation in the future.

On my scale of criterion when checking a cryptocurrency or new project, market capitalization is usually low on the list on what matters when deciding whether or not to buy that coin or token.
But knowledge on how to check predictable market capitalization would help save a lot of time in checking out shitcoins; if it is not possible to calculate the market cap, due to infinite supply or uncapped supply, then it is not worth considering at all.

If the amount of coins in circulation of a cryptocurrency cannot be predicted properly even in 20 years, such a cryptocurrency can be considered dangerous or unpredictable and this is an important reason to avoid this cryptocurrency. Because Altcoin developers already know why they are not disclosing such important information.

99% of altcoin are already shitcoins. Clouds of secrecy around the functioning of a project is highly indicative that what you're looking at on your screen is a scam.

[Lordsilvabtc]

This analysis seems to be superb, And can be applied, while searching for new crypto project except for Bitcoin to dump some cash into and gambled upon.

In my case of deciding which project to invest on, I usually don't sight the influence of market capitalization even those it seems to be very very important, I usually look out for their Utilities, their road map, what have they done and stuff like. Let's not forget that every established project today were once new too.

If we're to make use of this analysis, it will help us a lot, but at the same time, I also think it will rekt us along the way, we just can stick our tools into farming one iteam, we've got to be diversified into things with future potential

[1miau]

Predictability of the adjusted market capitalisation means if it’s possible for us to find out if the amount of a certain cryptocurrency in circulation will be known in the future. We will need the number of coins in order to be able to classify a certain market capitalisation in the future.

On my scale of criterion when checking a cryptocurrency or new project, market capitalization is usually low on the list on what matters when deciding whether or not to buy that coin or token.

Inflation is a very important criteria in my opinion but if you are just loking for a quick profit, inflation isn't an important metric. Inflation is getting relevant for your coin in the long term.
Short-term, inflation can be significant if it's a highly inflationary DeFi shitcoin where 50% of the supply is dumped in the first year.
But still, scarce coins will attract more buyers and especially large ones (institutional investors), even in short-term considerations.

If the amount of coins in circulation of a cryptocurrency cannot be predicted properly even in 20 years, such a cryptocurrency can be considered dangerous or unpredictable and this is an important reason to avoid this cryptocurrency. Because Altcoin developers already know why they are not disclosing such important information.

But knowledge on how to check predictable market capitalization would help save a lot of time in checking out shitcoins; if it is not possible to calculate the market cap, due to infinite supply or uncapped supply, then it is not worth considering at all.

99% of altcoin are already shitcoins. Clouds of secrecy around the functioning of a project is highly indicative that what you're looking at on your screen is a scam.

That's true, most Altcoins are Shitcoins. But I wouldn't call all Shitcoins which are obfuscating their coin metrics a scam, but still a very shady move of course. Let's take Polkadot, Polkadot is obfuscating statements about their circulating supply in the future. They have deleted documents and even the original documents were rather nebulous. It's a common tactic for Shitcoins to keep it vague and even from Ethereum we know that decisionmaking is very centralized. The difficulty bomb got delayed multiple times. Now Ethereum is advertising to be deflationary (if enough fees are burned) but it's very hard to predict, how many fees will be burned. Still, Ethereum can be considered far more scarce compared to Polkadot, where roughly 10% more coins are issued every year.
Especially large investors don't like unpredictability.
And we, as small investors, have many reasons to reject unpredictable and inflationary Shitcoins, like Polkadot, too.

You are right that it's essential to know how to evaluate marketcapitalisations of different coins and the Altcoin industry is also trying to make it very difficult for us to find it out. (advertise good characteristics, hide bad ones; it's how Altcoin marketing is done).

In my case of deciding which project to invest on, I usually don't sight the influence of market capitalization even those it seems to be very very important, I usually look out for their Utilities, their road map, what have they done and stuff like. Let's not forget that every established project today were once new too.

That's true, when evaluating an Altcoin, many characteristics need to be checked. Inflation is only one of those but a very important one, especially in the long term, in my opinion. As we have seen, the bear market can really destroy weak shitcoins as it exposes all the weaknesses of Altcoins.

[Darker45]

It is interesting to note, however, that despite the generally negative perception of coins that don't have a maximum supply cap, a significant number of them have actually made it to the top.

You've already mentioned Polkadot (DOT). Ethereum (ETH) is another-- although recent updates could actually make it deflationary-- and then there's Dogecoin (DOGE), Solana (SOL), and others.

This is perhaps a testament that many do not actually prioritize whether a coin has a max supply cap or not as their basis for buying or investment. Although it certainly matters, a lot of other factors matter more. 

[tranthidung]

• Circulating supply:
  
  • Infinite supply:
    Some coins don’t have a caped supply at all and there will be issued more coins constantly.
    For such coins, we need to look up properly how many of them will be in circulation at some point of time because such coins are at risk of MASSIVE INFLATION.  
    

Altcoins have many risks and one of them is minting from thin air. Their developer teams can mint new flow of token if they want to use the Mint function. They can mint it to resolve the case of hacks, blockchain compromises or to benefit themselves and make investors poorer.

The risk is we don't know what they will do with that Mint function. If anyone has yet known about the risk, do a research about Terra $LUNA that is rebranded to Terra Classic $LUNC.

[cryptoaddictchie]

In my case of deciding which project to invest on, I usually don't sight the influence of market capitalization even those it seems to be very very important, I usually look out for their Utilities, their road map, what have they done and stuff like. Let's not forget that every established project today were once new too.

If you are a long term investor then this is supposedly your main goal. But having knowledge on how the market capitalization could hint us a potentiality of the coin or token. This analysis by OP is really a well versed and totally helpful.

For certain reasons that some of the new projects are being identified as shitcoin is due to lack of clarity and dishonest approach. Like the tokenomics are bound by a lot of secrecy and tokens that can be monopolized.

[Charles-Tim]

You've already mentioned Polkadot (DOT). Ethereum (ETH) is another-- although recent updates could actually make it deflationary-- and then there's Dogecoin (DOGE), Solana (SOL), and others.

How about the ethereum upgrade that makes some of the transaction fee to be burned. Or is that no more possible again? I think no changes to that in the last ethereum merge that changes its network from PoW to PoS which makes the the coin and its blockchain becoming more centralized and has been the what experts are discussing and becoming worrisome. The reason I do not like most altcoins is because they are centralized and also the fact that the presently over 21600 altcoins that are existing, nearly all are shit coins and anyone among can be like the old Luna and others that led to losses of live savings of some people. People should take anything about altcoins as gambling.

[Darker45]

You've already mentioned Polkadot (DOT). Ethereum (ETH) is another-- although recent updates could actually make it deflationary-- and then there's Dogecoin (DOGE), Solana (SOL), and others.

How about the ethereum upgrade that makes some of the transaction fee to be burned. Or is that no more possible again? I think no changes to that in the last ethereum merge that changes its network from PoW to PoS which makes the the coin and its blockchain becoming more centralized and has been the what experts are discussing and becoming worrisome. The reason I do not like most altcoins is because they are centralized and also the fact that the presently over 21600 altcoins that are existing, nearly all are shit coins and anyone among can be like the old Luna and others that led to losses of live savings of some people. People should take anything about altcoins as gambling.

Anybody please correct me if I'm wrong. Ethereum's EIP-1559 update doesn't necessarily make it deflationary. The ETH burned is not fixed as it is taken from base fees. Since the amount of transactions in the network rise and fall, the amount burned also fluctuates. So when there are so many transactions and the amount burned is so high that it is higher than new coins issued, Ethereum becomes deflationary. But when the coins issued are higher than what is burned, then it is inflationary.

Ethereum's burning mechanism has been implemented since last year but it remained inflationary. I guess it was only just last month that Ethereum turned deflationary for the first time. That was after The Merge. And it was probably brought by the 90% reduction of ETH issuance, which was one of the effects of The Merge.

I also am not a big fan of altcoins and it's primarily because majority of them are nothing but a tool of greedy developers to make money.

[BlackHatCoiner]

Besides market cap being a misleading measure, isn't the entire topic flawed? Being a store of value, and being a highly appreciated asset doesn't seem to have any direct relation. There's one parameter, among others, that you don't take into consideration, and it's very important: monetary policy. Inflationary or not, infinite supply or not, it doesn't matter if you don't look at the monetary policy.

Take Ethereum as an example. Bitcoin's and Ethereum's monetary policies aren't the same. Bitcoin's is consisted of inflexibility. We know that there will be 21 million coins, and they'll come into circulation according to the given schedule. We've accepted this rule, and we're building on top of it. There's no going back. Bitcoin's monetary policy is non-negotiatable, and it is in fact the single most significant feature we all admire. It is characterized by stability, and censorship resistance.

Ethereum, on the other hand, is characterized by flexibility. The developers have said it themselves that they haven't programmed the proper policy yet. It isn't set in stone yet, and it'll most likely never be. Vitalik, as a highly influencive leader, might as well decide to censor certain transactions (it has happened more than once), or mess with the supply. Therefore, they're apples and oranges in the end. I wouldn't put my money to such subjectively driven project in the long run, even if it's highly appreciated.

[1miau]

Besides market cap being a misleading measure, isn't the entire topic flawed? Being a store of value, and being a highly appreciated asset doesn't seem to have any direct relation.

I have to disagree here because issuing more coins constantly can really kill an (Alt)coin. Not today, not tomorrow, not in 2 weeks but maybe in 2 oder 4 years.
In fact, denying that inflation for Altcoins is a big problem and this talking point was first brought up by Shitcoin marketing. It is stupid Shitcoin propaganda, which is pushed constantly by leading centralized Shitcoins such like Polkadot to get more gullible bagholders.  
Bitcoin is designed as a store of value for a reason.
And it's extremely hard to change that, which is very positive.
Of course, Shitcoins want us to believe that issuing more coins is something good. There's a whole bunch of Shitcoin propaganda circulating around that bringing new coins into circulation is somehow beneficial for the coin itself. Most of it is misleading. I would say, yes it is beneficial for centralized PoS Altcoin developers and rich stakers. And for everyone else, it's negative.
So yes, it's positive for probably 10% of the coinholders and not beneficial for probably 90%.

By calculating the numbers from Polkadot, it's pointing out how insane such an inflation will devalue some inflationary PoS-Shitcoins:

Example Polkadot:

Polkadot is considered a highly inflationary altcoin based on nPoS (which is practically dPoS). According to current sources, Polkadot's inflation amounts to about 10% annually, which depends on how much Polkadot is staked. But normally it’s around 10% annually.
In addition, excess Polkadot from inflation can circulate back to Polkadot founders even with a different amount of staked Polkadot, as well as confiscated Polkadot, which can be used or burned by Polkadot developers.

However, there are only a few sources about Polkadot's inflation, since Polkadot's statements of most official sources are limited to the first year or Polkadot even completely deleted most previously available sources, like here (https://w3f-research.readthedocs.io/en/latest/polkadot/economics/1-token-economics.html#inflation-model)
It’s not available anymore.  
Which is definitely a very big red flag!!
Some information is only available on third-party sites anymore which analyzed Polkaot’s documents when they were still up, such as here: https://www.coinbase.com/de/cloud/discover/solutions/polkadot-token-economics

Currently, Polkadot has a circulating supply of approximately 1,150,000,000 Polkadot at a price of $7.36 per Polkadot, which results in a current market capitalisation of approximately $8,464,000,000.

Assuming 10% annual inflation, the amount of Polkadot would increase to an amount of about 16,500,000,000 Polkadot by 2050, which is 12 times more compared to now.
At current prices of $7.36 per Polkadot, it would mean an adjusted market capitalisation of approximately $120,000,000,000,000,, which would be worrisome 1400 percent above today's market capitalisation.
As a reminder: Bitcoin is only just under 10 percent here.
Anyone who knows about markets can only conclude that the price per Polkadot will decrease massively by 2050. Considering the same market capitalisation in 2022 vs. 2050, the price per Polkadot would have to decrease from $7.36 today to $0.51 (!) in 2050.

Conclusion: Polkadot is an inflationary Shitcoin where large quantities of Polkadot Coins coming into circulation in the future will go to rich stakers...
The price per Polkadot Coin will drop massively when looking at Polkadots adjusted market capitalisation (for example 2050).

That's why I wouldn't touch inflationary Shitcoins.

I’m not talking about Ethereum here because Ethereum is different from my analysis. If we apply my analysis on Ethereum, yes, we will see some red flags. But we will also see that for the current situation, inflation isn’t a problem for Ethereum currently. But it can change, which is a red flag in my opinion. It’s not predictable.
Or take Avalanche, it’s also capped. But it could be changed quite easily which is also a red flag.
And Ethereum + Avalanche are already one of the best Altcoins.

There's one parameter, among others, that you don't take into consideration, and it's very important: monetary policy. Inflationary or not, infinite supply or not, it doesn't matter if you don't look at the monetary policy.

Yes, monetary policy can be helpful but it's up to the Altcoin developers which need to be honest. It's not necessarily bad if the Ethereum devs were elected because by electing we could remove them if we don't agree with their actions.

Take Ethereum as an example. Bitcoin's and Ethereum's monetary policies aren't the same. Bitcoin's is consisted of inflexibility. We know that there will be 21 million coins, and they'll come into circulation according to the given schedule. We've accepted this rule, and we're building on top of it. There's no going back. Bitcoin's monetary policy is non-negotiatable, and it is in fact the single most significant feature we all admire. It is characterized by stability, and censorship resistance.

Ethereum, on the other hand, is characterized by flexibility. The developers have said it themselves that they haven't programmed the proper policy yet. It isn't set in stone yet, and it'll most likely never be. Vitalik, as a highly influencive leader, might as well decide to censor certain transactions (it has happened more than once), or mess with the supply. Therefore, they're apples and oranges in the end. I wouldn't put my money to such subjectively driven project in the long run, even if it's highly appreciated.

I can agree here, Ethereum is quite different from Bitcoin and it's legit to try out new ideas. I can support that.
But the issue is when an Altcoin is flawed from the beginning. Not just technically flawed, like Solana but also fundamentally flawed. And PoS Coins tend to be fundamentally flawed. It's legit to try to solve these problems. But the problem is fraudulent marketing to get more bagholders. Shitcoins are good at fraudulent marketing.
There are various examples for misleading marketing like miscalculating tx/second or downplaying inflationary tokenomics where rich stakers are profiteers or calling dPoS nPoS etc etc. Shitcoin marketing can be very misleading.
Ethereum isn't a coin, which is coming to my mind when bringing up fraudulent Altcoins, but for example, Polkdot is (inflation) or Solana (flawed tech), too.
It's already possible to see the disaster coming. That's what my topic is about: calculating ourself if there will be issues in the future, for specific coins.

Anybody please correct me if I'm wrong. Ethereum's EIP-1559 update doesn't necessarily make it deflationary.

You are right, Ethereum is only deflationaryif enough fees are burned.
There's a a statistics site about it: https://ultrasound.money/

Altcoins have many risks and one of them is minting from thin air. Their developer teams can mint new flow of token if they want to use the Mint function. They can mint it to resolve the case of hacks, blockchain compromises or to benefit themselves and make investors poorer.

The risk is we don't know what they will do with that Mint function. If anyone has yet known about the risk, do a research about Terra $LUNA that is rebranded to Terra Classic $LUNC.

+1
Very important point.

[pooya87]

It is a good idea to analyze market capitalization better and try to come up with more realistic values but I'd argue that it is still data not information. In order to process that data to then make a decision you have to look at other factors. At the end of the day only utility is defining whether something is worth investing in and can be a store of value or not.

Imagine you want to buy a stock (or better yet penny stock since they are more similar to altcoins). You don't really look at the market capitalization! Instead you check whether the company has anything valuable to offer. For example if you buy Apple's share you know they are producing a product that is used by many customers but someone working out of their garage and calling that a "company" doesn't make it a valuable purchase.

It's the same with cryptocurrencies. In this existing market we have at least 2 exact copies of bitcoin (bcash and bsv) that have the exact same market capitalization (circulating supply, etc.) as bitcoin. Nobody can call them "store of value" simply because they are useless.
And that uselessness is why Polkadot dumps (86% in the past year) or bcash dumps (97% since 2017) not because of their market cap.

[Renampun]

• Circulating supply:
  
  • Infinite supply:
    Some coins don’t have a caped supply at all and there will be issued more coins constantly.
    For such coins, we need to look up properly how many of them will be in circulation at some point of time because such coins are at risk of MASSIVE INFLATION.  
    

Altcoins have many risks and one of them is minting from thin air. Their developer teams can mint new flow of token if they want to use the Mint function. They can mint it to resolve the case of hacks, blockchain compromises or to benefit themselves and make investors poorer.

The risk is we don't know what they will do with that Mint function. If anyone has yet known about the risk, do a research about Terra $LUNA that is rebranded to Terra Classic $LUNC.

it also reminds me of Ethereum Classic. ethereum developers create new tokens for reasons of stronger security. altcoins are not very suitable for investment, especially long term, we will find a lot of drama going on there and it has happened over and over again in many projects. Bitcoin has never been changed or modified since it first appeared and that is what makes bitcoin so unique and special.[/list]

[Adbitco]

Sorry to say does it mean investing in altcoin presently dangerous?
What I saw from your analogy seems anyone investing in altcoin is at a very big risk, then secondly I know we learn everyday and all time so I can't say I knew it all. If it happens that I found an altcoin to invest, how do I determines the following processes which you have outlined?
Lastly was thinking investing in an altcoin solely depends on project team, use-case and effectiveness of the project because
what actually made me lost interest in altcoin was the effect of 2017 thereabout which few altcoin that tends to have lots of feature couldn't survived the bear which I then drastically change my mind to bitcoin.

[BlackHatCoiner]

Yes, monetary policy can be helpful but it's up to the Altcoin developers which need to be honest.

This is precisely my point. If monetary policy is up to someone, it's flawed comparison. The key aspect of cryptocurrency is to replace trusted third parties, not endorse them. It is to eliminate unreliable factors, not include them. A more proper analogy would be between EUR and ETH, both of which have a pro-feudalistic policy.

It's not necessarily bad if the Ethereum devs were elected because by electing we could remove them if we don't agree with their actions.

First of all, they weren't elected. Second, election for having the responsibility of a monetary phenomenon is again precisely the kind of flaw I'm arguing; that is, it brings centralization, and introduces unreliable factors whose decisions can screw the economy up. Third, judging by the Ethereum user base, and the funding of its development from gigantic commercial banks, do you see any user dared to question the decisions, and request a fork? How's ETC doing?

[1miau]

Imagine you want to buy a stock (or better yet penny stock since they are more similar to altcoins). You don't really look at the market capitalization! Instead you check whether the company has anything valuable to offer.

Stocks and Altcoins are very difficult to compare in my opinion. Stocks are fundamentally different from Altcoins and most "guidelines" for stocks / traditional markets are difficult to apply for Altcoins. I've written about it previously: Is diversification into different coins really a good advice for Newbies?
Maybe it's because Altcoins are very different from Stocks because Stocks are backed by a company producing a real product, (most) Altcoins aren't. Altcoins are just offering the Altcoin itself. The Altcoin is their product.
But you are right, inflation is only one issue to rewiew. A good Altcoin needs much more than just being scarce. Of course, scarcity is a very important metric and even if all the other metrics are fine, deflation can make a coin very unattractive.

It's the same with cryptocurrencies. In this existing market we have at least 2 exact copies of bitcoin (bcash and bsv) that have the exact same market capitalization (circulating supply, etc.) as bitcoin. Nobody can call them "store of value" simply because they are useless.

Isn't a fork some sort of "inflation" as well? 
Bitcoin can be forked as often as some self-proclaimed Satoshis want to.
That's why a Shitfork can't be scarce in my opinion. It's just a copy from the original. Only the Original can be scarce.

Sorry to say does it mean investing in altcoin presently dangerous?

I'm not giving any investment advice, just some input for people to apply when reviewing a coin but most (all?) Altcoins have much more risks compared to Bitcoin. Outlining all the risks would be too much here but inflation is one of the downsides of Altcoins. So, yes, I would say investing in Altcoins is risky (compared to Bitcoin).

What I saw from your analogy seems anyone investing in altcoin is at a very big risk, then secondly I know we learn everyday and all time so I can't say I knew it all. If it happens that I found an altcoin to invest, how do I determines the following processes which you have outlined?

Buying Altcoins might also give you high profits, no doubt. But it can also go the other way down and you'll end up with some useless Shitcoins.
We just need to compare some top 20 Altcoins from 2017 / 2018 and where they are now: some aren't even relevant anymore = huge loss.
You can be lucky or not. 

There are also differences between Altcoins. Some can outperform Bitcoin, some will be outperformed by Bitcoin.
But after all Bitcoin has been Coin number 1 since Bitcoin was invented.

Yes, monetary policy can be helpful but it's up to the Altcoin developers which need to be honest.

This is precisely my point. If monetary policy is up to someone, it's flawed comparison. The key aspect of cryptocurrency is to replace trusted third parties, not endorse them. It is to eliminate unreliable factors, not include them. A more proper analogy would be between EUR and ETH, both of which have a pro-feudalistic policy.

Sure, it's depending on which Altcoin we want to analyze. And there's also not only black and white because after all the amount of inflation per year matters.
But my calculations are making a difference between Altcoins suffering from 10% inflation per year (insanely high inflation) and less inflationary ones like Ethereum ("sane" inflation). Altcoins suffering from less inflation will be rated better. 
By looking 25 years ahead, we can try to get a picture of it.

It's not necessarily bad if the Ethereum devs were elected because by electing we could remove them if we don't agree with their actions.

First of all, they weren't elected. Second, election for having the responsibility of a monetary phenomenon is again precisely the kind of flaw I'm arguing; that is, it brings centralization, and introduces unreliable factors whose decisions can screw the economy up. Third, judging by the Ethereum user base, and the funding of its development from gigantic commercial banks, do you see any user dared to question the decisions, and request a fork? How's ETC doing?

Yes, electing Ethereum developers where 1 ETH = one vote wouldn't work of course because it would lead to rich stakers abusing it. Rich stakers will get a big issue for (a decentralized) Ethereum in my opinion. A fair election process for Ethereum developers wouldn't be possible unter these conditions. That's why I'm in favor of giving not too much power to Altcoin developers.
Fair elections where 1 person = 1 vote is extremely difficult to implement for Altcoin governance, at least currently. But such a fair vote would bring decentralisation to Ethereum.
That's why I'm in favor of less inflationary Altcoins, it's better for decentralisation.
As you've pointed out, forks wouldn't end well, too.

[pooya87]

Isn't a fork some sort of "inflation" as well?

Technically no. Imagine you want to purchase something from a vendor that accepts bitcoin payments. You have no way of paying them using bsv simply because bsv is not bitcoin, ergo creating the copy did not cause inflation. They are just cheap useless ripoffs.

[BlackHatCoiner]

Sure, it's depending on which Altcoin we want to analyze. And there's also not only black and white because after all the amount of inflation per year matters.

I don't see how the inflation per year is relevant with this comparison.

I doubt you can get an even slight picture of a centralized-governed cryptocurrency in 25 years from now. Especially with a history full of centralized-governed cryptocurrencies that reached the bottom after a few hyped years, which brings me to my point again: a hyped, recently appreciated cryptocurrency doesn't mean it'll keep it going in the long run.

Fair elections where 1 person = 1 vote is extremely difficult to implement for Altcoin governance, at least currently.

That's why I'm of the opinion that there shouldn't be elections at all in the way a cryptocurrency works. Running your own node, writing code, mining the chain, using this forum etc., don't require democracy; and that's why bitcoin has not stopped working properly for over a decade now, against all odds.

[tranthidung]

it also reminds me of Ethereum Classic. ethereum developers create new tokens for reasons of stronger security.

Ethereum and Ethereum Classic are not tokens. They are native currencies of Ethereum network and Ethereum Classic network.

altcoins are not very suitable for investment, especially long term, we will find a lot of drama going on there and it has happened over and over again in many projects.

Most of them are not good for investment because many of them will die in one bear market and mostly don't have their lifespan more than 4 year or a full market cycle.

If you say about Ethereum, BNB, Litecoin and Dogecoin, they are good to invest in but you should choose a good entry to join.

Bitcoin has never been changed or modified since it first appeared and that is what makes bitcoin so unique and special.

Are you sure about it?

If no upgrade, how do we have Bitcoin Segwit, Taproot (another type of Segwit) ?

• Segregated Witness - Segwit
• Taproot softfork and its adoption

[1miau]

Isn't a fork some sort of "inflation" as well?

Technically no. Imagine you want to purchase something from a vendor that accepts bitcoin payments. You have no way of paying them using bsv simply because bsv is not bitcoin, ergo creating the copy did not cause inflation. They are just cheap useless ripoffs.

Technically, it's not affecting Bitcoin because it's a different coin.
So indeed, the bold part is important, leading us to:

That's why a Shitfork can't be scarce in my opinion. It's just a copy from the original. Only the Original can be scarce.

Sure, it's depending on which Altcoin we want to analyze. And there's also not only black and white because after all the amount of inflation per year matters.

I don't see how the inflation per year is relevant with this comparison.

Yearly inflation is the most important part from damaging inflation. The more inflation, the more dangerous. That's what I've explained above.
We just need to look at Polkadot and the fact that in 2050, 12 times of Polkadot's current supply will exist. In 2050 roughly the same number of coins will be minted yearly as Polkadot's marketcap is today. It's like if there would be 20 million BTC printed in 2050 in a single year - every year! - and that number would even be increasing every year = exponential growth!
Maybe I can create a graph of it to visualize it somewhen later but numbers should be clear.
It's like Turkish Lira etc. where inflation is getting through the roof and nobody want to hold such an asset. Same for Altcoins and the yearly inflation is key here. Some inflationary DeFi Shitcoins have already collapsed.

I doubt you can get an even slight picture of a centralized-governed cryptocurrency in 25 years from now. Especially with a history full of centralized-governed cryptocurrencies that reached the bottom after a few hyped years, which brings me to my point again: a hyped, recently appreciated cryptocurrency doesn't mean it'll keep it going in the long run.

Of course, governance could change metrics like inflation if things are getting bad but there's no guarantee for that.

Fair elections where 1 person = 1 vote is extremely difficult to implement for Altcoin governance, at least currently.

That's why I'm of the opinion that there shouldn't be elections at all in the way a cryptocurrency works. Running your own node, writing code, mining the chain, using this forum etc., don't require democracy; and that's why bitcoin has not stopped working properly for over a decade now, against all odds.

But instead it's even worse to rely on a few guys "managing" the Altcoins and especially in PoS coins, developers are owners of a large chunk of the premined coins as a "foundation" and it's giving them much power.
I don't know if you have heard about IOTA but one of the reasons, IOTA has so many problems is because developers didn't agree how to proceed and they had some infights instead. This problem will be likely to catch most centralized Altcoins when big promises (from marketing) can't be kept.