Cryptocurrencies are now a part of popular vernacular. Bitcoin certainly is, having dominating “wild ride”-type headlines in 2017. Of course, our readers at BitcoinWarrior know that Bitcoin isn’t the only crypto, and some of the altcoins are serious competition. Perhaps more importantly, Bitcoin solves a certain type of problem, while other cryptos solve other problems better. Maybe then the competitors are more like cooperators or complements than direct competitors.
Jumping on the bandwagon
November and December 2017 and January 2018 was the hype period. People wanted to invest in cryptocurrencies, and anything with “crypto” attached to its name garnered attention. Exchanges popped up; some were crushed under regulation, others hacked into oblivion, and still others remain. Diversification is important, even if the entire crypto market is ultimately swayed by Bitcoin news, because investors shouldn’t place all their nest eggs into the single proverbial basket.
What to invest in, though, is also important. For the speculators, the hype period was the “I just 5x’ed my portfolio” period, but now is the much slower real adoption period. The cryptos that win this period will be the ones that remain, and only those that have useful features will survive.
For Business – and the long term
Those useful features must fulfill some kind of market need. Ethereum fulfills the smart contract need; Monero fulfills the anonymity need; RaiBlocks fulfills the no-fee, low-transaction need. Bitcoin itself was the precursor to these other cryptos, and as the “progenitor of cryptocurrencies”, it fulfills the network advantage and first mover needs: businesses have started to accept Bitcoin and not the others simply because the competition is also accepting Bitcoin.
However, as time and innovation move forward, it seems likely that Bitcoin’s complementary competitors will begin to take over in their respective niches. Already there are literally hundreds of Ethereum-based tokens, so businesses that need smart contracts will turn to Ethereum. And it is well-known that those interested in privacy should avoid Bitcoin, so altcoins like Monero and Zcash fulfill that need.
Whatever an altcoin features, it needs to show true promise of returns in business now to be profitable. The financial explosion is over. Now is the time to adopt the technology and show the world the potential of blockchain. As the use cases rise and implementation begins, cryptocurrencies will truly be on their way to becoming viable forms of exchange and value storage.
For more info on some of the most popular (and useful cryptos), see this succinct and well-designed infographic.