Now that you have an understanding of blockchain and bitcoin, it is a logical next step to look at the so called Altcoins.
Basically any cryptocurrency other than Bitcoin is an altcoin.
In the early part of the previous century the automobile was invented. What we saw happening there is similar to what we see with any new invention: the first prototype triggers others to come up with a better version, faster, more gears, other features.
It is exactly what is happening with the bitcoin blockchain technology. It invited other programmers to come up with versions that could do certain things that the blockchain technology cannot.
If you would look at job vacancies in IT it is very obvious there are massive opportunities for blockchain programmers.
One of the better known Altcoins is Ethereum, which has become very popular amongst software programmers. Monero is one gaining grounds at the moment and Litecoin is one of the more popular altcoins.
To identify which Altcoin has potential and which has not, it is important to look at the protocol that is mining them. Does this protocol have something of value to offer that has a market, a demand for it? That is the key question.
End of October Zcash launched and got enormous attention. The reason for it is that it has been developed for 4 years, had 2 external audits prior to launch AND it has total anonymity. Bitcoin has partial anonymity: your name will not be found in the blockchain, but any transaction can be linked back to you as your bitcoin wallet is registered to your name. Launching a protocol is one thing, creating the market, the demand for it is another. It is up to Zcash now to expand on the use, the demand in the market in order for it to gain momentum and value. In the first 24 hours after launch we saw $2m being paid for 1 coin. At the moment this post is written the value is around $50.
It isn’t easy to see which coins will last and gain market share and which will not. It is quite impossible to predict future value of any coins. I will not even try to do something like it.
If you’d consider getting involved with altcoins it is recommended to read up on each of them. On Coinmarketcap you can access loads of information on over 700 altcoins (and bitcoin of course).
If the protocol used for mining has no new features compared to already existing coins, the odds are not favorable that it will gain market share. There are quite a few bogus coins out there, where it isn’t even clear what protocol is used. Be extremely cautious on those. In a next episode of this series I’ll write about the many scams out there and how to spot them.
Since I’m not a fortune teller, I won’t be able to give you any guidance on which coin has the best outlook. What I do is simply follow people who are knowledgeable on the subject and who are NOT marketers. Marketers have a tendency of telling you what they think will ‘sell’ you and the amount of nonsense being stated is truly frightening.
The founder of the company I’m involved with is one of the experts I carefully listen to and so is our Operational Director of the mining facility. Imagine these two gentlemen talking their “bytes and nodes” and just listening to that conversation…like Alice in Wonderland. 🙂
There is not much more to tell about altcoins that hasn’t already been shared in Part 3 on Bitcoin.
If you haven’t read the previous parts yet, I’d strongly recommend to read these as well.