Recently, we assessed the raison d’être for altcoins, of which multitudes have recently popped into existence. The thinking was that while a select few have some unique value to offer, the vast majority are unnecessary. At best, they are but a redundant copy of something we already have, branded differently perhaps for some intended utilitarian purpose. At worst, they are scams, poorly veiled vehicles for pump and dump.
This topic was discussed yesterday at the CoinSummit taking place in San Francisco, one of the highest profile events of its kind in the crypto world. The panel discussion was with the heavy hitters in the altcoin world: Charlie Lee, founder of Litecoin; Jackson Palmer, founder of Dogecoin; Paul Vernon, founder of Cryptsy; and moderated by Michael Terpin, founder of SocialRadius, a social media marketing agency.
As to the general question of: do we need altcoins? The answer was a resounding ‘yes’. But do we need more than just the select few which appear, on the surface, to have something unique to offer? Yes again. The experts have spoken.
Especially notable is that both Lee and Palmer, captains of two of cryptocurrency’s biggest and most successful coins, could have easily written off the remainder as insignificant in order to bolster their own coins, yet they did the exact opposite. Furthermore, they emphasized, by extension, that they’re all Bitcoin supporters- a sentiment you don’t see too often in their communities’ respective forums.
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The central theme was that cryptocurrency today is in its early stages as an unfolding, evolving technology, analogous to the internet protocol during its earliest days. There were multiple protocols at the time, which were tested and iterated relative to one another until there was consensus as to the ideal recipe.
Altcoins today are essentially an experiment for the future of cryptocurrency. There are several variables which need to be optimized to get to that perfect currency, or currencies. Hence, the more we have, the more we can experiment and learn.
Furthermore, because cryptocurrency is intended for a worldwide clientele, there may be people or regions which are not as well exposed or have some cultural, language or other block impeding successful adoption. Hence the need for some obscure coins they can better relate to, such as Yacoin or Ybcoin in China.
They divergent characteristics of the coins can also serve us well in the future. For example, Bitcoin can be used for large purchases, Litecoin for smaller purchases and Dogecoin for tipping.
And thus they shouldn’t be perceived as explosive investment opportunities or get-rich-quick plans. However, the advent of pre-mined coins, such as “national” coins like Auroracoin, was considered by Palmer as unfortunate, as they are designed such that the originators and early adopters profit at everyone else’s expense. While early adopters have also gained monumentally from Bitcoin, Litecoin and Dogecoin, that is a testament to their growing value as a technology for future currency.