Bitcoin was the first and every other cryptocurrency came from it. Will Bitcoin survive? Will altcoins survive? This has been a heated debate with one side predicting the demise of the other. Bitcoin maximalists claim that we are heading to Bitcoin dominance and that altcoins are dying, urging the people to sell their positions in other crypto assets to put it all in Bitcoin. In a tweet last year, Charlie Lee wrote: “Some self-proclaimed Bitcoin Maximalists, are actually Bitcoin Extremists. They think all other coins are scams and will go to zero. Maximalists think Bitcoin is and will remain the dominant cryptocurrency, but there is room for altcoins to exist and even do well. What are you?”
Ilias Louis Hatzis is the Founder at Mercato Blockchain Corporation AG and a weekly columnist at DailyFintech.com.
In 1994, Umberto Eco wrote that the Macintosh was Catholic and that DOS was Protestant. Bitcoin and other cryptocurrencies have a lot in common with religions and have developed their own belief systems. They all share faith in the value and power of decentralization. But just like different religions, every cryptocurrency is on its own path to the truth.
On January 2019, Roger Ver, posted:
Coinism is the new nationalism. pic.twitter.com/v4RP2swRre
— Roger Ver (@rogerkver) January 5, 2019
Like Orthodoxy in some religions, people tend to become extreme and intolerant to any other faith and deviation from the original.
In the cryptocurrency world, these people are called “maximalists”. A maximalist is a person that has extreme views and is not prepared to compromise. In his tweet Ver, a Bitcoin Cash evangelist, posted a picture of two identical sides, where “ours” has only good attributes, and “theirs” is shit.
Religions give us some clues as to how these ecosystems will evolve. Yet, there’s not one truth in the path to enlightenment. Bitcoin’s dominance is unquestionable, it’s eight times bigger than Ethereum, the second cryptocurrency.
But the fact is that as blockchain and cryptocurrency technology develops, we’re going to see many alternatives. As different cryptocurrencies make technology choices and trade-offs, trying to solve problems, we will see different coins occupy different niche markets. Even at the top it’s it’s going to be crowded, with at least two or three competitors in every application you can imagine.
We’re not going to end up with one system that does everything. That doesn’t make sense with this technology.
When you look at the evolution of cryptocurrencies, initially we had one, Bitcoin. Since we’ve seen the appearance of hundreds of coins, now thousands and in the future we will even see tens of thousands. The growth of new blockchains and tokens, doesn’t seem to be slowing down. In the last decade a thousand coins died, while close to 3,000 are still in existence.
You can expect to see more failures and initiatives come and go, just like we saw in the 90s dotcom market. But this is great from a technology perspective, because it only contributes to the evolution of the industry. Keep in mind that just because there are many alternatives, it doesn’t mean that every coin listed on Coinmarketcap.com is worth looking at or even buying.
In the crypto market there are no barriers that would stop someone from building something different or allow someone to build a monopoly. That’s one of the great aspects of this market, its openness. There is one big difference between crypto and religions. It is difficult to be a member of multiple religions, but it very easy to use multiple cryptocurrencies. Competition to create the best cryptocurrency has sparked an evolution that led to forks and new coins, birthing new things like #Ethereum, #Litecoin, Bitcoin Cash, #Bitcoin SV, Bitcoin Gold, #IOTA, #Ripple, #Stellar to name a few.
The idea that an environment of multiple competing cryptocurrencies is undesirable, is just wrong. While Bitcoin has clearly outperformed most cryptocurrencies, to expect that this will always be the case strikes me as stupid.
Cryptocurrencies keep on increasing because of our desire for constant improvement. Having several thousand cryptocurrencies isn’t a bad thing. Each represents a solution to a different problem.
While many are still ahead of their time, as technologies and communities mature, they will begin to disrupt industries like never before. IOTA, which uses a blockchain-like variation, is working to connect IoT devices. Using this network, your car will be able to interact with sensors and devices all around the city you live in. The “Ethereum Virtual Machine” (EVM) is capable of running smart contracts that represent financial agreements, employment contracts, and act as trusted escrow for the purchase of high value items.
Even if some coins don’t stand the test of time, they will surely influence the direction of cryptocurrencies to come. We love some and hate others. Freedom offers choices and this is what cryptocurrency is all about.
Subscribe by email to join the other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research)