Why are there so many alternative cryptocurrencies?

[MicroGuy]

- by Chris Thompson

There exist hundreds of alternative coins. Many of these coins are effectively copies of prior released ones with minor specification alterations to source code. As specified in the course of the book I am writing, coins have differing coin supplies, block times, timestamping methods, hashing algorithms and so on.

Bitcoin is not classed as an alternative coin because it was, of course, the first cryptocurrency created. It paved the way of all the other coins to follow. Bitcoin dominates the space of cryptocurrency in terms of the market capitalisation it possesses and the much higher media attention it has achieved.

Other reasons why so many alternative cryptocurrencies have become available are:

• Founders create their coin as a viable competitor to Bitcoin. Competition within the cryptocurrency space is seen by many to be healthy.
• Some communities have focused on certain industries, charities, themes and people in the marketing of their coin. Sometimes it is the name of the coin that determines or influences its underlying purpose or audience.
• Developers use the source code of prior coins to which they add/substitute their own innovative code. For example, the developers of Megacoin invented the Kimoto Gravity Well Difficulty Re-Target Algorithm. This was then adopted by over one hundred other coins.

A lot of alternative cryptocurrencies fail to gain traction within the space. The reasons for this becoming the case could be a lack of developer interest, a lacklustre community following or a fall out between the initial founders, developers and marketing team. Nevertheless, a lot can be learnt from the failure of alternatives by all coin communities. As soon as they see how things can fail, they are more prepared to improve upon past mistakes by others.

Simply put, the altcoin space can be described as an “experimental playground” in which certain innovative features can be built, tested and then maybe implemented.

Full Story: http://altcoinpress.com/2014/10/why-are-there-so-many-alternative-cryptocurrencies/

[MrBig]

99% of alt coins are pump-and-dump scams. The reason so many worthless alts have been introduced is because of greed and because cryptos are open source, so it's not that hard for the average person to change a few parameters and introduce their own coin.

I remember after reading about that silly flappy bird game, there were so many dumb clones put out by greedy developers going to rake in big bucks on a simple game.

[cexylikepie]

because if you make your own coin for free you pretty much always make money

[rabbiter]

What some people are missing is that many of the latest developments in altcoins are not new coins but new systems that have their own currency.


Therefore systems like NXT, NEM and Qora have true utility as they can all hold digital wealth be it their own currency, fiat, gold other coins etc. So it's not a zero sum game, many players can thrive alongside each other. I think of it more like different services or different banks. No one thinks you can't have more than one bank, why not more than one digital system you hold wealth in?

Also other developments are revolutionising the stock exchange with the ability to hold stocks and shares etc.


of course most new coins are junk but some will likely be used for decades to come alongside Bitcoin.

[UnunoctiumTesticles]

Q: Why are there so many alternative cryptocurrencies?

A: Because all crypto-currencies to-date are speculative "investments" (gambles), not currencies.

The demographics of crypto-currencies are currently speculative gamblers, not currency users. Thus there is always a demand for a new speculation which can be purchased earlier and cheaper. If someone ever creates a currency, then the users will demand there only be one, because having one unit-of-account means currency users aren't stressed with exchange volatility. Exchange volatility actually decreases currency use, because users have an incentive to not spend when the price is lower than their entry price, and not sell when the price is going higher.

Btw, the reason we are moving to a global currency is because currency users are beginning to transact globally more often, e.g. ordering online from Alibaba or DHgate, migrant workers remittances, etc..

[Yurizhai]

Q: Why are there so many alternative cryptocurrencies?

A: Because all crypto-currencies to-date are speculative "investments" (gambles), not currencies.

What about NuBits?

[UnunoctiumTesticles]

Q: Why are there so many alternative cryptocurrencies?

A: Because all crypto-currencies to-date are speculative "investments" (gambles), not currencies.

What about NuBits?

So the concept is we let the US Federal Reserve control the debasement of our crypto-currency.

On top of that we apply the certain failure of democracy (voting) to centralize our crypto-currency with ProofOfShit.

Nevermind widespread distribution as that wouldn't have anything to do with making a currency.

Absolutely fucking brilliant. Why didn't I think of that?

[kelsey]

You can count in one hand the ones that did something positive and somewhat revolutionary after bitcoin

and that be the underlining problem; too large a proportion of this community needs their fingers to count thereby allowing what would normally be unsustainable models to exist for longer then they'd do in real world markets.

[toast]

Q: Why are there so many alternative cryptocurrencies?

A: Because all crypto-currencies to-date are speculative "investments" (gambles), not currencies.

What about NuBits?

So the concept is we let the US Federal Reserve control the debasement of our crypto-currency.

On top of that we apply the certain failure of democracy (voting) to centralize our crypto-currency with ProofOfShit.

Nevermind widespread distribution as that wouldn't have anything to do with making a currency.

Absolutely fucking brilliant. Why didn't I think of that?

This is a terrible criticism of nubits because it is a criticism of the USD. Fine, adopt it to your preferred monetary theory and make an alt-nubit that is supposed to track whatever global price you want.

By the way I think nubits is well-intentioned but totally broken but that's a separate discussion...

[UnunoctiumTesticles]

Q: Why are there so many alternative cryptocurrencies?

A: Because all crypto-currencies to-date are speculative "investments" (gambles), not currencies.

What about NuBits?

So the concept is we let the US Federal Reserve control the debasement of our crypto-currency.

On top of that we apply the certain failure of democracy (voting) to centralize our crypto-currency with ProofOfShit.

Nevermind widespread distribution as that wouldn't have anything to do with making a currency.

Absolutely fucking brilliant. Why didn't I think of that?

This is a terrible criticism of nubits because it is a criticism of the USD. Fine, adopt it to your preferred monetary theory and make an alt-nubit that is supposed to track whatever global price you want.

The criticism was absolutely apropos because tracking an external unit has nothing to do with creating a unit-of-account.

[Yurizhai]

Q: Why are there so many alternative cryptocurrencies?

A: Because all crypto-currencies to-date are speculative "investments" (gambles), not currencies.

What about NuBits?

So the concept is we let the US Federal Reserve control the debasement of our crypto-currency.

On top of that we apply the certain failure of democracy (voting) to centralize our crypto-currency with ProofOfShit.

Nevermind widespread distribution as that wouldn't have anything to do with making a currency.

Absolutely fucking brilliant. Why didn't I think of that?

This is a terrible criticism of nubits because it is a criticism of the USD. Fine, adopt it to your preferred monetary theory and make an alt-nubit that is supposed to track whatever global price you want.

The criticism was absolutely apropos because tracking an external unit has nothing to do with creating a unit-of-account.

I don't think so. Whether or not you like that it's tied to USD doesn't change my point, that it's not a speculative gamble. No one is buying NuBits hoping they increase in value, maybe NuShares but not the bits.

[Outlander]

Maybe it's a chance, but sometimes I called it plagiarsm.

Every dev of the coin want to make money like earlier coin did.
But some of new coins are shit.

[Yurizhai]

By the way I think nubits is well-intentioned but totally broken but that's a separate discussion...

If it's the kicking the can down the road thing again, it's already on it's way to being addressed 

[UnunoctiumTesticles]

Q: Why are there so many alternative cryptocurrencies?

A: Because all crypto-currencies to-date are speculative "investments" (gambles), not currencies.

What about NuBits?

So the concept is we let the US Federal Reserve control the debasement of our crypto-currency.

On top of that we apply the certain failure of democracy (voting) to centralize our crypto-currency with ProofOfShit.

Nevermind widespread distribution as that wouldn't have anything to do with making a currency.

Absolutely fucking brilliant. Why didn't I think of that?

This is a terrible criticism of nubits because it is a criticism of the USD. Fine, adopt it to your preferred monetary theory and make an alt-nubit that is supposed to track whatever global price you want.

The criticism was absolutely apropos because tracking an external unit has nothing to do with creating a unit-of-account.

I don't think so. Whether or not you like that it's tied to USD doesn't change my point, that it's not a speculative gamble. No one is buying NuBits hoping they increase in value, maybe NuShares but not the bits.

Eliminate wild-eyed speculation on gains from currency taking over the world, and don't actually provide any way for it to gain widespread distribution to become a currency, then nothing remains.

Pegging to USD doesn't a widespread digital currency make.

NuBits' pegging design eliminates any impressive speculative gains the early users of the currency could reap, which could lead to viral marketing.

P.S. I never wrote that a solution was to eliminate speculative gains. My first post in this thread does not assert that growing to be a currency is mutually exclusive to speculative gains.

Whether or not you think the distribution of NuBits is going to be widespread enough for it to be a currency does not matter.

Whether NuBits has a technological design and marketing strategy that can distribute it widespread is all that matters. I see none. For example one of the technological issues would be the maximum transaction rate that can be accommodated by the design. One has to look at many factors such as CPU load for verifying signatures and for updating the UXTO or Account Tree, network bandwidth, orphan rate, verification speed impacting propagation delays impacting percentage of the hashrate needed for selfish-mining, etc., etc., etc..

Amateur developers need not apply.

[Yurizhai]

Q: Why are there so many alternative cryptocurrencies?

A: Because all crypto-currencies to-date are speculative "investments" (gambles), not currencies.

What about NuBits?

So the concept is we let the US Federal Reserve control the debasement of our crypto-currency.

On top of that we apply the certain failure of democracy (voting) to centralize our crypto-currency with ProofOfShit.

Nevermind widespread distribution as that wouldn't have anything to do with making a currency.

Absolutely fucking brilliant. Why didn't I think of that?

This is a terrible criticism of nubits because it is a criticism of the USD. Fine, adopt it to your preferred monetary theory and make an alt-nubit that is supposed to track whatever global price you want.

The criticism was absolutely apropos because tracking an external unit has nothing to do with creating a unit-of-account.

I don't think so. Whether or not you like that it's tied to USD doesn't change my point, that it's not a speculative gamble. No one is buying NuBits hoping they increase in value, maybe NuShares but not the bits.

Eliminate wild-eyed speculation on gains from currency taking over the world, and don't actually provide any way for it to gain widespread distribution to become a currency, then nothing remains.

Pegging to USD doesn't a widespread digital currency make.

NuBits' pegging design eliminates any impressive speculative gains the early users of the currency could reap, which could lead to viral marketing.

P.S. I never wrote that a solution was to eliminate speculative gains. Read my first post in this thread and make sure you understand the logic of exclusion.

Whether or not you think the distribution of NuBits is going to be widespread enough for it to be a currency does not matter.

Q: Why are there so many alternative cryptocurrencies?

A: Because all crypto-currencies to-date are speculative "investments" (gambles), not currencies.

This is what I'm responding to. Is there some arbitrary number of users a currency has to have for it to meet the literal definition of the word currency? Because if not, you are wrong.

[Momimaus]

Cause Supernet needs enough coins to choose from :-)
The chosen ones will survive, the others will die. Simply as that.

[finlon]

Each new altcoin comes in a form of an experiment. Almost every altcoin is a copy and paste of a coin from the past plus adding a couple of features. And this experiment is what promotes altcoins. Like anonymity/faster transaction time/block time etc.

[BanditryAndLoot]

Q: Why are there so many alternative cryptocurrencies?

A: Because all crypto-currencies to-date are speculative "investments" (gambles), not currencies.

The demographics of crypto-currencies are currently speculative gamblers, not currency users. Thus there is always a demand for a new speculation which can be purchased earlier and cheaper. If someone ever creates a currency, then the users will demand there only be one, because having one unit-of-account means currency users aren't stressed with exchange volatility. Exchange volatility actually decreases currency use, because users have an incentive to not spend when the price is lower than their entry price, and not sell when the price is going higher.

Btw, the reason we are moving to a global currency is because currency users are beginning to transact globally more often, e.g. ordering online from Alibaba or DHgate, migrant workers remittances, etc..

I'm sure it's been discussed already, but do you know of anywhere on this forum (Maybe one of your Martin links talks about it? Come on man! I've got a job to look for today, too! ) I can look to that discusses exchange volatility in cryptocurrencies vs. exchange volatility in fiat? I'm trying to understand the correlation between your statement and the observation that multiple forms of fiat exist.

I can  think of many things outside of exchange volatility as to why that is, but I'm sure someone's discussed this before?

Admittedly, your point about the move toward a global currency because of increasing global transactions has merit, but maybe more than just that can help me understand the proliferation of hundred's of different fiat currencies to date, in the face of exchange volatility?

[UnunoctiumTesticles]

Q: Why are there so many alternative cryptocurrencies?

A: Because all crypto-currencies to-date are speculative "investments" (gambles), not currencies.

The demographics of crypto-currencies are currently speculative gamblers, not currency users. Thus there is always a demand for a new speculation which can be purchased earlier and cheaper. If someone ever creates a currency, then the users will demand there only be one, because having one unit-of-account means currency users aren't stressed with exchange volatility. Exchange volatility actually decreases currency use, because users have an incentive to not spend when the price is lower than their entry price, and not sell when the price is going higher.

Btw, the reason we are moving to a global currency is because currency users are beginning to transact globally more often, e.g. ordering online from Alibaba or DHgate, migrant workers remittances, etc..

Admittedly, your point about the move toward a global currency because of increasing global transactions has merit, but maybe more than just that can help me understand the proliferation of hundred's of different fiat currencies to date, in the face of exchange volatility?

I don't recall any prior discussion. I believe I am first to state it that way, at least from everything I've digested over the internet over the past 8 years.

The national fiats existed because each government wanted to write its own debt (that comes from Armstrong) and because its citizens didn't need to do international exchange.

The next global currency might just be for importers and exporters to hedge with, unless we move to full blown global transactions between individuals.

And the other political selling point is to have a currency which is not beholden to the corrupt politics of any nation (which will become so evident and hated as we descend into the economy abyss after 2015.75), so the BIS, WorldBank, etc.. can regulate its supply.

So that begets my bifurcation of the global economy concept. I have argued in the threads such as Economic Devastation and Dark Enlightenment that the retail and industrial (physical goods) economy is dying (the governments will tax it to death, profit margins near 0 due to China, etc) and the virtual (downloadable goods, e.g. 3D printer designs) is the fast growing future.

Thus the coming fiat global units (e.g. SDRs) could be for the dying economy.

Thus any paradigm shift crypto-currency must target the new economy and create the new global unit-of-account. We need to race out ahead of Paypal and Apple Pay.

The latest flurry of Armstrong links explain the transition underway towards the above outcome.

[Sutters Mill]

We all know the reason why. Just greed. Most try operate under the illusion of catering to a niche in the market, but the devs only create them to get rich quick. They dump them then move on. Probably close to 99% of these other coins are completely pointless.