Receive all Cointelegraph news immediately in Telegram.
Today, 660 alternative currencies exist. How many of them had a target market or use in mind before they were created?
With more than 660 alternative currencies in existence today, according to CoinMarketCap.com, and only a few are popularly used, it begs the question to know whether these coins really had a target market or use in mind before they were created.
Some of these coins are not mineable, some premined, and others record low untraceable 24-hour trading volumes or as low as $11 with no better prospects for the future by the look of things today.
Hence, some of them have been tagged to be 'brand only.' The Executive Director of a non-profit digital trust, Strength in Numbers Foundation, David Duccini, says most altcoins are built to fail “because they are vacuous “brand only” coins that do not have actual utility.”
“If you look at the list of coins on coinmarketcap they are by the numbers merely just forks with graphic changes and a few minor tweaks to the algorithms — like emit time, total coinbase size etc. They tend to focus on features and not on the benefits. The tokens themselves do not have any utility that is not already satisfied by BTC or LTC or even DOGECOIN which is a prime example of a brand coin. For tokens to have some actual value, they must have a market and utility outside of a cryptocurrency exchange otherwise you get a death spiral of pump-n-dump between miners and speculators.”
The CTO of Emercoin, Oleg Khovayko, agrees with Duccini. He compared the altcoins to be the same as 70% of the startups which die in the first three years of their inception. He thinks the large number of existing coins are having an impact on the growth of a few coins which supposedly have a clear purpose but are lost at the bottom of the list.
“The impact exists, but not significantly,” he said via a Skype chat. “Many altcoins have interesting distinctive features, and I prefer to see them in the world.”
On why he thinks they are ‘not significant,’ he stated that “The total capitalization of all coins available is $13billion according to coinmarketcap.com. $10 billion is in BTC. So, imagine if all altcoins stop, and all this money moves to BTC, it's price will be increased by 30% which is comparable to its monthly volatility.”
The price of Emercoin, whose 24-hour volume rose to $2.1 million following its trading pair EMC/CNY which commenced BTC38 July 20 almost doubled, with trading volume increased by five fold.
Lisk CEO, Max Kordek, has a similar view. He says many cryptocurrencies out there are just ‘coins,’ circulating in a dead network solving no problem.
“I can't speak for every cryptocurrency but many never had any bigger goal, target market, or use in mind,” he said via email. “However, even projects with a great vision have problems (failure rate for regular startups is about 90%. In the Blockchain industry this number is probably bigger). I think the biggest mistake everyone has is to solve everything at once and trying to implement dozens of different features. It's a marathon. I don't think within the next 12-18 months we will see major adoption cycles. It takes time to build the foundation, then it takes time to build a good product, then it takes time to design a great UX, and maybe then you can expect hundred of thousands of users. Not before. So staying in the game for a long time and being consistent. This is key for me.”
Follow us on Facebook
For updates and exclusive offers, enter your e-mail below.
One fine body…
Thank you for contacting us! We will reply to you as soon as possible.
Thank you for your interest in our franchise program.
We are considering your request and will contact you in due course. If you have any further queries, please contact:
Reset letter sent.
Please checkout your mailbox for password reset details